According to classical marginal productivity theory, workers are paid
A. a real wage
B. the value of their time
C. the value of their marginal product
D. the value of total output
Ans: C. the value of their marginal product
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The practice of charging different prices to various groups of customers that are not based on differences in the costs of production is referred to as:
A) predatory pricing. B) markup pricing. C) discretionary pricing. D) price discrimination.
The existence of positive economic profits in an industry attracts new entrants into the industry.
Answer the following statement true (T) or false (F)
The policy directive that is produced from the FOMC meeting:
A. sets the specific discount rate for the next eight weeks. B. instructs the staff of the New York Fed on how to manage the Fed's balance sheet. C. sets the specific range that the target interest rate can fall within. D. details the exact amount of U.S. Treasury securities the System Open Market Account Manager is to purchase or sell.
Moral hazard is a situation in which asymmetric information results in high-quality goods or high-quality consumers being squeezed out of transactions because they are unable to demonstrate their quality.
Answer the following statement true (T) or false (F)