Refer to the above figure. The curve reflects
A) the law of diminishing marginal product in labor.
B) the law of diminishing marginal product in capital.
C) the law of increasing marginal product in labor.
D) the law of increasing marginal product in capital.
Answer: A) the law of diminishing marginal product in labor.
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When firms benefit from the results of research and development they didn't pay for, we say firms
A) maintain a level playing field. B) free ride. C) are litigious. D) invest in knowledge capital.
Suppose that Bill is a big movie buff and enjoys renting movies from the local video rental outlet
Assume that he is willing to pay $5 for the first movie he rents for the weekend but would only pay $4 for a second and still only $3 for a third movie. If the video rental franchise charges $3.50 per movie what will Bill's consumer surplus be and why? Assume now that the video rental franchise now has a new package deal in which it offers to rent three movies to customers at a price of $9.00 would Bill be interested? How much consumer surplus would he enjoy now? What is the maximum price that the video rental franchise could charge and still make Bill interested in the package deal?
If we compare the Baby Boom generation of workers to the number of workers who came before and will come after them, we realize that, all other things equal, the Baby Boomer's labor:
A. supply will be relatively greater at any wage. B. supply will be relatively lower at any wage. C. demand will be relatively greater at any wage. D. demand will be relatively lower at any wage.
To increase the money supply, the Fed might: a. increase the discount rate and sell bonds in the open market
b. decrease the reserve requirement and buy bonds in the open market. c. increase the reserve requirement and sell bonds in the open market. d. increase the discount rate and lower the reserve requirement. e. sell government securities and increase the discount rate.