Hotspur Incorporated, a manufacturer of microwaves, is a price taker in both the input and output markets. To maximize its profit, Hotspur will hire labor up to the point where
A) the marginal revenue product of labor equals the wage rate.
B) the marginal revenue product of labor equals the output price.
C) the marginal product of labor is no longer positive.
D) all economies of scale have been exhausted.
A
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An unequal distribution of income is considered fair according to Robert Nozick if
A) marginal cost equals marginal benefit. B) the cost of administering a welfare system is minimized. C) property rights are enforced and voluntary exchange occurs. D) the economy is producing its maximum total output. E) resources are allocated using the command method.
The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. If the fixed cost of entry were to increase, which of the following would occur?
A) The incumbent chooses the Cournot level of output. B) The incumbent shuts down. C) The entry-deterring level of output rises. D) The entry-deterring level of output falls.
Economics is considered to be part of the field of
a. management science b. mathematical sciences c. actuarial science d. social sciences e. natural sciences
If an economy with constant returns to scale were to double its physical capital stock, its available natural resources, and its human capital, but leave the size of the labor force the same,
a. its output would stay the same and so would its productivity. b. its output and productivity would increase, but less than double. c. its output and productivity would increase by more than double. d. None of the above is correct.