A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of wheat is $2 a bushel, the wage rate is $10, and the farmer employs five workers. If the farmer is maximizing his profits, then the marginal product of the fifth worker is
A. 0.2 bushels.
B. 5 bushels.
C. 20 bushels.
D. indeterminate from the given information
Answer: B
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How do you determine is a foreign exchange market is efficient?
A) See if the market rates adjust quickly to new and relevant information. B) See if systematic profit opportunities are quickly eliminated. C) See if forward rates are equal to expected future spot rates. D) All of the above should be true if a foreign exchange market is efficient.
Assuming money neutrality in the classical model, a 10% increase in the nominal money supply would cause
A) a 10% increase in the real money supply. B) a 10% decrease in the real money supply. C) no change in the real money supply. D) a less-than-10% change in the price level due to a shift in the aggregate supply curve.
After the American Revolution, the public domain expanded and the amount of community property held by the federal government grew considerably. If it had stayed community property, there would have been problems, according to Hughes and Cain (2011)
These problems include which of the following? (a) Individuals using it would not have incentive to conserve it or use it wisely. (b) The problem of "free riders" would have been troublesome and resulted in a "free-for-all," which could have ended in violence. (c) Each person faced incentive to overuse the communal rights of others. (d) All of the above.
If Iceland can produce fish with fewer resources than Greenland, we have evidence of
a. specialization b. geographic advantage c. comparative advantage d. absolute advantage e. free trade