The table below shows a competitive firm's short-run production function. Labor is the firm's only variable input, and market price for the firm's product is $2 per unit.
If market price for the firm's product increases to $5, how many units of labor will the firm employ at a wage rate of $200?
A. 0, the firm shuts down
B. 4
C. 5
D. 6
E. 7
Answer: C
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With which of the Ten Principles of Economics is the study of international trade most closely connected?
a. People face tradeoffs. b. Trade can make everyone better off. c. Governments can sometimes improve market outcomes. d. Prices rise when the government prints too much money.
As opposed to earlier crises, in the economic crisis of 2008-2009, the initial inability to pay came from
a. lending institutions. b. firms and individuals. c. states. d. the U.S. federal government.
Discounting refers directly to
a. finding the present value of a future sum of money. b. finding the future value of a present sum of money. c. calculations that ignore the phenomenon of compounding for the sake of ease and simplicity. d. decreases in interest rates over time, while compounding refers to increases in interest rates over time.
Which of the following statements about the minimum wage is true?
A. The minimum wage has not had any impact on income inequality. B. Due to minimum wage increases, income inequality is now lower than it was in the mid-20th century. C. The minimum wage tends to create inflation, which benefits the wealthy more than the poor. D. Adjusting for inflation, the real minimum wage has fallen in the last 40 years.