Why would a company be more enthusiastic in providing more training to its workers during an economic downturn than during an economic boom (assuming that they do not layoff their workers and can keep them when the economy recovers)?
What will be an ideal response?
During an economic downturn the opportunity cost of training workers is likely to be much smaller in terms of lost production. However, during an economic boom the costs are much larger because while employees are being trained they are not producing and selling as much output as they otherwise could if they were performing their normal duties.
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Consider the market for feather pillows. If there is an increase in the price of feather dusters, a substitute in production for feather pillows, then
A) there is a downward movement along the demand curve for feather pillows. B) the supply curve for feather pillows shifts leftward. C) the price of feather pillows decreases. D) the demand curve for feather pillows shifts rightward. E) the demand curve for feather pillows shifts leftward.
If the marginal product of a unit of physical capital is 10 units of output, and the product that the physical capital is used to produce is sold for $5, the value of the marginal product of physical capital equals:
A) $2. B) $10. C) $20. D) $50.
Suppose that at the beginning of a loan contract, the real interest rate is 4% and expected inflation is currently 6%. If actual inflation turns out to be 7% over the loan contract period, then
A) lenders gain 3% of the loan value. B) borrowers lose 3% of the loan value. C) lenders gain 1% of the loan value. D) borrowers gain 1% of the loan value.
A monopolist always earns an economic profit
a. True b. False Indicate whether the statement is true or false