
Figure 10.2 depicts a firm's marginal revenue product curve. Suppose that we observe the firm demanding five workers. If the firm is maximizing its profit, the wage rate must be between ________ and ________.
A. $5; $10
B. $10; $15
C. $15; $20
D. $25; $30
Answer: B
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The benefit from an additional unit of a good or service that the consumer of that good or service receives is the
A) marginal private benefit. B) marginal external benefit. C) marginal social benefit. D) opportunity cost.
Demand is inelastic if the price elasticity of demand is
a. less than 1. b. equal to 1. c. greater than 1. d. equal to 0.
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A) a cooperative equilibrium. B) a noncooperative equilibrium. C) new potential entrants. D) a threat of substitute goods.