By saying that MRS = MRT, an economist means that
A) for all goods, the value that society places on the last unit produced equals the cost of making that unit.
B) for all goods, the value that a consumer places on the last unit consumed equals the value that all consumers would place on that unit.
C) society is able to produce more output of one good without reducing the output of any other good.
D) no other output mix is technically feasible.
A
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The price elasticity of demand for an exhaustible natural resource tends to
A. fall over time because extraction costs rise over time. B. stay constant over time because the resource’s price rises at a constant rate. C. rise over time because the resource’s rising price stimulates conservation and the development of substitutes. D. rise over time because resource extraction tends to become more efficient over time.
At existing wage rates, hospitals face a shortage of registered nurses (RNs). Some studies have suggested that an increase in RN wages will actually reduce the hours supplied by existing RNs, making it more difficult for hospitals to find RNs. Which of the following is likely the cause of these findings?
A. Constant marginal productivity B. The cost disease C. A substitution effect larger than the income effect D. An income effect larger than the substitution effect
Which one of the following statements about piece rate compensation schemes is false?
A. They discourage nepotism. B. They tie pay to performance. C. They are preferred by discriminatory firms. D. They attract more able workers. E. They elicit high levels of effort.
Suppose that the expected inflation rate is 3 percent and the actual inflation rate is 6 percent. Then borrowers
A. are worse off and lenders are better off. B. and lenders are both worse off. C. are better off and lenders are worse off. D. and lenders are both better off.