Wally's Wheat Farm sells its output and hires its labor in perfectly competitive markets. In the short run, Wally can vary only one input-labor. In short-run equilibrium, all of the following conditions, except one, will be satisfied. Which is the exception?
a. The marginal revenue product of labor equals the wage rate.
b. The marginal revenue product of labor would decrease if more labor is hired.
c. Marginal revenue equals the price of the firm's output.
d. The marginal product of labor would decrease if more labor is hired.
e. The firm's total revenue will decrease if more labor is hired.
E
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If penalties are imposed on both the buyers and the sellers of illegal goods or services, then an effect in the market for the illegal good or service would definitely be
A) an increase in the equilibrium price. B) a decrease in the equilibrium price. C) a decrease in the equilibrium quantity. D) an increase in the equilibrium quantity.
Empirical estimates indicate that the annual welfare cost of monopoly in the United States
a. ranges from less than 1 percent to 5 percent of national income b. ranges from 10 percent to 20 percent of national income c. is approximately 10 percent of national income d. is approximately $1 billion e. is approximately $1 trillion
As long as interest-earning opportunities exist, present dollars are worth
A. More than future dollars. B. Less than inflation-adjusted dollars. C. Less than future dollars. D. More than previous periods' dollars.
The effect of a tariff on a foreign monopolist is similar to a large nation imposing a tariff on a small nation. What is the implication for the welfare of the home nation?
a. Only very large tariffs bring any benefit to the home nation. b. No tariffs are the best policy; all tariffs have a deadweight net loss. c. Small tariffs can be beneficial, but only to a certain point. d. The foreign producer may actually raise prices to make the tariff impossible to impose.