The MRTS is currently -2. The wage rate is $15 per hour and the rental rate is $30 per hour. It follows that
a. the marginal product of capital is twice that of labor.
b. the marginal product of labor is twice that of capital.
c. the marginal product of capital is equal to that of labor.
d. no statement about marginal productivity can be made without more information.
a. the marginal product of capital is twice that of labor.
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Macroeconomics focuses on the behavior of economic agents such as the consumer, a business firm, or a specific market
a. True b. False
Most economists believe that the market __________ produce nonexcludable public goods because of the __________
A) will; monetary incentive they have to produce them B) will not; externality problem C) will not; free rider problem D) will; market shortage that often accompanies the production of public goods. E) none of the above
Labor unions ______
a. raise wages in unionized industries.
b. create labor shortages in non-unionized industries.
c. play a larger role in the current U.S. economy than in European countries such as Norway and Sweden.
d. prefer to operate in states with right-to-work laws.
If the Fed purchases federal government bonds on the open market, bank reserves will
A) decrease leading to a decrease in the money supply. B) increase leading to a decrease in the money supply. C) increase leading to an increase in the money supply. D) decrease leading to an increase in the money supply.