A worker has a marginal product of 15 units a day, each of which can be sold for $10. Is it profitable to hire this worker if the wage rate is $100 a day? Briefly explain your answer

What will be an ideal response?


It is profitable to hire this worker because the worker's value of marginal product is $150 a day (the price, $10, times the marginal product, 15 units), which exceeds the wage rate of $100 a day. The worker creates $150 more revenue for the firm at a cost of only $100. Hence it is profitable to hire this worker.

Economics

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If a lower exchange rate spurs exports then why wouldn't it be a good idea of policymakers to intervene to push the exchange rate as low as they can?

What will be an ideal response?

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It is difficult in a natural monopoly market for the firm to achieve both efficiency and zero economic profit simultaneously, even with regulation

a. True b. False Indicate whether the statement is true or false

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The laissez faire view of government involvement in the economy is most consistent with the

A. Supply-side theory. B. Keynesian theory. C. Monetary theory. D. Classical theory.

Economics

Which of the following have substantially equivalent effects on a nation's volume of exports and imports?

A. Exchange rate appreciation and a decrease in the domestic supply of money. B. Exchange rate appreciation and domestic deflation. C. Exchange rate depreciation and domestic deflation. D. Exchange rate depreciation and domestic inflation.

Economics