If more and more labor is employed while keeping all other inputs constant, the marginal physical productivity of labor will eventually:
a. increase.
b. decrease.
c. remain constant.
d. cannot tell from the information provided.
b
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In the short run, a perfectly competitive firm will shut down if at the profit maximizing quantity the
A) P < AVC. B) AVC < ATC. C) P > ATC. D) P > MC.
In August 2008, Ethan Nicholas developed the iShoot application for the Apple iPhone 3G, and within five months had earned $800,000 from this program. By May 2009, Nicholas had dropped the price from $4.99 to $1.99 in an attempt to maintain sales
This example indicates that in a competitive market A) earning an economic profit in the long run is extremely easy. B) economic profits are only earned in the long run. C) earning an economic profit in the long run is extremely difficult. D) it is impossible to earn an economic profit in either the short run or the long run.
The velocity of money is
A) the average number of times that a dollar is spent in buying the total amount of final goods and services. B) the ratio of the money stock to high-powered money. C) the ratio of the money stock to interest rates. D) the average number of times a dollar is spent in buying financial assets.
In a two-period model, holding everything else constant, an increase in current-period income
A) unambiguously increases the current account surplus. B) unambiguously decreases the current account surplus. C) has an uncertain effect on the current account surplus. D) has no effect on the current account surplus.