Assume that both the goods and the labor market are perfectly competitive. If at equilibrium, the marginal cost faced by a firm is $3 and the market wage rate is $6, the marginal product of the last unit of labor hired by the firm must be:
A) 0.5 units.
B) 2 units.
C) 9 units.
D) 18 units.
B
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Always There Wireless is wireless monopolist in a rural area. There are 200 customers, each of whom has a monthly demand curve for wireless minutes of Qd = 200 - 100P, where P is the per-minute price in dollars and Q is the number of wireless minutes. The marginal cost of providing the wireless service is $0.25 per minute. If Always There charges $0.25 per minute, how many minutes will each customer buy each month?
A. 175 B. 200 C. 2 D. 225
In which situation would contractionary monetary policy be most effective?
A) The economy has been in a long recession but signs of improvement are starting to appear. B) A crisis overseas has led to a spike in oil prices, causing the price of gasoline and other goods to increase. C) Consumer confidence is very strong, leading to a record holiday shopping season despite fewer discounts being offered. D) Businesses worry that shoppers are being very cautious about their spending because they are concerned about job safety.
When the Federal Reserve buys bonds on the open market, it decreases the money supply
Indicate whether the statement is true or false
Firms price discriminate
A) to take advantage of customers. B) to reduce the quantity sold so as to reduce production costs. C) to increase profits. D) to increase total economic surplus.