Under a free agent structure, the wage paid to a professional athlete is likely to be close to his
A. deadweight loss.
B. marginal revenue product.
C. reservation wage.
D. average compensation.
Answer: B
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Saving by households
A) decreases when the real interest rate rises. B) increases when the real interest rate rises. C) increases when the real interest rate falls. D) is unaffected by the real interest rate.
Refer to Figure 2-17. One segment of the circular flow diagram in the Figure shows the flow of funds from market F to economic agents G. The funds represent spending on goods and services. What is market F and who are economic agents G?
A) F = factor markets; G = households B) F = factor markets; G = firms C) F = product markets; G = firms D) F = product markets; G = households
The marginal revenue product of land curve indicates
a. the additional output generated by an additional unit of land, other things constant b. the additional cost to the firm when it employs an additional unit of land, other things constant c. the additional profit the firm earns when it employs an additional unit of land, other things constant d. the additional revenue the firm earns when it employs an additional unit of land, other things constant e. the amount of land required to produce an additional unit of output, other things constant
In the term "real GDP," what does "GDP" stand for and what does it measure? What does "real" indicate?
What will be an ideal response?