When the marginal product of labor ________ the average product of labor, then the average product is maximized.
A. is less than
B. is greater than
C. equals
D. The average product of labor is never maximized.
Answer: C
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If the reserve ratio is designated by "r," the amount of deposits a bank can hold as excess reserves is equal to 1 / (1 - r)
Indicate whether the statement is true or false
If Johnny weren't in economics class this morning, he'd be sleeping. The value Johnny places on sleeping represents his:
A. marginal benefit. B. incentives. C. sunk cost. D. opportunity cost.
The behavior of the perfectly competitive firm: a. theoretically leads to an inefficient allocation of resources
b. maximizes the benefits to consumers, given the resources available to the economy. c. reduces output in order to raise prices in the short-term. d. results in excess capacity and inefficiency.
Economists use some familiar terms in specialized ways
a. to make the subject sound more complex than it is. b. because every respectable field of study has its own language. c. to provide a new and useful way of thinking about the world. d. because it was too difficult to come up with new terms.