Labor is a firm's only variable input. The firm should hire additional units of labor as long as the wage is less than or equal to the marginal revenue product of that additional unit of labor.
Answer the following statement true (T) or false (F)
True
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The deadweight loss due to a ________ is always smaller than the deadweight loss due to a ________
A) tax on each unit sold; per unit tax on each unit bought B) per unit tax on each unit sold; per unit tax on each unit bought C) tax on each unit sold; lump-sum tax D) lump-sum tax; tax on each unit bought
If the quality or quantity of a particular public service is very difficult to monitor, government is more likely to
a. produce the service itself b. contract with private firms to supply the service c. take over private corporations to produce the service d. refuse to provide the service e. raise the price to consumers of the service
What lesson for Chinese economic reform?
a. Economic liberty comes before market institutions b. Authoritarian regimes are good at initiating reforms c. Deng placed economic reforms before political reforms d. China has the one child-family policy. e. All of the above
Which of the following is purchased in a product market?
A. The skills of an X-ray technician. B. Undeveloped farmland in Texas. C. Crude oil. D. Cell phone service.