Output for a simple production process is given by Q = KL, where K denotes capital and L denotes labor. The price of labor is $10 per unit and the price of capital is $2 per unit.Suppose at the current level of production the firm is minimizing costs and the marginal product of labor is 10. Given this you know that the marginal product of capital must be
A. 5.
B. 10.
C. 2.
D. It is impossible to say with the information given
Answer: C
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Refer to the figure above. What is the equilibrium wage rate and equilibrium level of employment?
A) $35 and 10 units of labor B) $20 and 15 units of labor C) $15 and 35 units of labor D) $25 and 20 units of labor
In the figure above, if the minimum wage is $8 per hour, then
A) resources used in job-search activity increase compared to the situation before the minimum wage. B) it is legal to hire workers for a wage below the minimum wage because otherwise unemployment would result. C) the deadweight loss is minimized. D) Both answers A and B are correct. E) Both answers B and C are correct.
Before the South Korean financial crisis, sales by the top five chaebols (family-owned conglomerates) were
A) nearly 50% of GDP. B) about 10% of GDP. C) almost 90% of GDP. D) nearly 25% of GDP.
If Ep is 3500 and Y is 3000, then
A) planned inventory accumulation is 500. B) planned inventory depletion is 500. C) unplanned inventory accumulation is 500. D) unplanned inventory depletion is 500.