Which of the following holds true in a market when the invisible hand functions properly?
a. MC = MU = P
b. P = MRS
c. P = MC but not P = MU
d. P = MU but not P = MC
a
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In the classical model there is complete crowding out when government spending increases, but in the short-run macro model there is only partial crowding out
a. True b. False
Minimum-wage laws dictate the
a. average price employers must pay for labor. b. highest price employers may pay for labor. c. lowest price employers may pay for labor. d. the highest and lowest prices employers may pay for labor.
Consider a world of two countries producing only wheat and cloth. In one hour, residents of Country A can produce 1 unit of wheat and 0.5 unit of cloth, whereas residents of Country B can produce 0.3 unit of wheat and 0.4 unit of cloth. Country A should
export A) wheat and cloth; country B should not export anything. B) wheat and country B should export cloth. C) nothing and country B should export both wheat and cloth. D) cloth and country B should export wheat.
Sweet Husks is a perfectly competitive corn farm. Currently, the expected price of an ear of corn is $0.40 and, at its current production level, Sweet Husks has a marginal cost of $.30 per ear. The expected profit from producing an additional ear of corn is ________.
A) $0.10 B) $0.70 C) $0.20 D) $0.40