Applying a price of labor to the law of diminishing returns generates:
a. the law of increasing costs.
b. less output as more labor is hired.
c. differences in the quality of labor.
d. a negatively-sloped labor supply curve.
e. specialization and the division of labor.
a
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According to the Application, what percentage of the world's population currently lives in urban squatter settlements and therefore has very little housing security?
A) 1% B) 10% C) 30% D) 50%
For a firm that can effectively price discriminate, who will be charged a lower price?
A) buyers that are members of the smallest market segment B) customers who have an elastic demand for the product C) buyers that are members of the largest market segment D) customers who have an inelastic demand for the product
Suppose the Fed cares only about keeping the economy close to full-employment output
The Fed can target the real money supply (thus keeping the LM curve fixed) or it can target the real interest rate, changing the money supply and shifting the LM curve however is necessary to prevent a change in the real interest rate. (a) Which is the best policy if the main shocks to the economy are shocks to the IS curve? Explain why. Illustrate with a diagram. (b) Which is the best policy if the main shocks to the economy are shocks to real money demand? Explain why. Illustrate with a diagram.
Consider the opportunity costs of producing goods X and Y that are listed for the four individuals above. Which person has a comparative advantage in producing good Y?
A) Pramilla B) Sam C) George D) Lucas