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.
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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?
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
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.
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.