Refer to the following graph. The price of capital (r) is $20.
If, at the optimal combination of inputs for producing 14,000 units of output, the marginal product of capital is 40, what is the marginal product of labor?
A. 80
B. 60
C. 40
D. 27.7
E. impossible to tell from the graph
Answer: B
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A. Everything else remaining unchanged, if there is no wage rigidity in the market, how will equilibrium employment and wage rate change if there is a leftward shift in the demand curve for labor?
b. Everything else remaining unchanged, if there is no wage rigidity in the market, how will equilibrium employment and wage rate change if there is a rightward shift in the supply curve of labor?
For a monopolist, the marginal revenue gained when one more unit of output is sold is
A) the price at which the extra unit is sold minus the loss in revenue that results from cutting the price on units sold previously. B) equal to the price of the product. C) negative if price is above the midpoint of the demand curve. D) the average revenue created by the increased sales.
Which of the following producers likely faces the most significant barrier to entry in its industry due to government regulation?
a. toy manufacturer b. pharmaceutical firm c. glass manufacturer d. soap producer
In general, an increase in wages will lead to some reaction in line with
A. the income effect but not the substitution effect. B. the substitution effect but not the income effect. C. both the income and substitution effect. D. neither the income effect nor the substitution effect.