Which of the following does not affect the marginal physical product of labor?
A. A worker’s abilities and degree of work effort
B. The amount of capital available per worker
C. The technical know-how of the management of the firm
D. An increase in wages
Answer: D
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If expected inflation is 12 percent and the publicly regulated electric utility company is legally limited to a 10 percent rate of return, then we should expect
a. increased investment by the utility. b. expansion of electric power generating capacity. c. future power shortages. d. excess investment by the electric utility.
Which of the following is the best definition of money?
a. anything generally accepted as a payment for goods or repayment of debt b. anything that is a liability of the federal government c. anything that is a liability of a commercial bank d. the outstanding balances of households on credit cards
Suppose an American worker can make 50 pairs of gloves or grow 300 radishes per day. On the other hand, a Bangladeshi worker can produce 100 pairs of gloves or grow 200 radishes per day. Using the concept of absolute advantage, which of the following statements is true? The United States:
A. has the absolute advantage in the production of gloves, but not radishes. B. does not have the absolute advantage in the production of either gloves or radishes. C. has the absolute advantage in the production of radishes, but not gloves. D. has the absolute advantage in the production of both gloves and radishes.
If marginal product is greater than average product, then
A. marginal product must be decreasing. B. marginal product must be increasing. C. average product must be decreasing. D. marginal product could either be increasing or decreasing.