As a firm hires more workers, holding capital and other factors constant, the marginal physical product of labor declines because
A) there are diseconomies of scale.
B) less efficient workers are hired as the number of workers increase.
C) workers don't perform well in teams.
D) the amount of other inputs each worker has to work with declines as the number of workers increases.
D
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Spreading wealth across multiple investments is called
A) diversification. B) arbitrage. C) speculation. D) asset liquification.
Someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. This person has
a. confused association and causation. b. misunderstood the ceteris paribus assumption. c. used normative economics to answer a positive question. d. built an untestable model.
Providing workers with on-the-job training will increase:
A. the labor force participation rate. B. the unemployment rate. C. average labor productivity. D. the share of the population employed.
Refer to the following graph.
The Gini coefficient is calculated as area:
A. A divided by area A + B. B. A divided by area B. C. A + B divided by area B. D. B divided by area A.