If the price of a firm's output rises, its
A) marginal product of labor increases.
B) value of marginal product decreases.
C) demand for labor increases.
D) demand for labor decreases.
C
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Diminishing returns occurs because
A) consumers don't buy enough of the products produced. B) one of the inputs in the production process is fixed. C) not enough people have jobs. D) two people have not satisfied their self-interests.
Suppose the market-clearing price of wheat is $2.50 per bushel. At a price above $2.50,
A) supply would equal demand. B) quantity supplied would equal quantity demanded. C) quantity supplied would exceed quantity demanded. D) quantity supplied would be less than quantity demanded.
That only large, well-established corporations have access to securities markets
A) explains why indirect finance is such an important source of external funds for businesses. B) can be explained by the problem of moral hazard. C) can be explained by government regulations that prohibit small firms from acquiring funds in securities markets. D) explains why newer and smaller corporations rely so heavily on the new issues market for funds.
The government introduced a requirement that all gasoline used in the US must use an increased share of ethanol in the gasoline sold. Consider the market of corn - a commodity which is used in ethanol production. Indicate whether there is a shift in supply (S) or demand (D).
a. Demand b. Supply