If MRPlabor/MRClabor > MRPcapital/MRCcapital, then the firm should
a. hire more labor
b. substitute capital for labor
c. not change anything
d. buy more capital
e. decrease the amount of labor
A
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Milton Friedman first proposed the hypothesis that individuals consume a fraction of their expected, or ________, income
A) disposable B) net C) attainable D) permanent E) life-cycle
Which of the following exemplifies the most likely benefit of free trade?
a. All the citizens of Topland received payment for the shirts the nation traded to other nations. b. Gameland’s economy grew when its products gained popularity with foreign consumers. c. Manufacturing workers in Steelberg were laid off when production moved overseas. d. Citizens of Lumberville had ample sunshine after they traded their trees for computers.
Suppose that government used to requires airline companies to have at least 30 airplanes and serve at least 20 different airports. Now, this requirement changed to a minimum of 10 airplanes and 4 different airports. Such change in regulation will lead to
A) lower profits due to increased competition. B) higher profits due to decreased competition. C) higher profits due to weaker labor unions. D) lower profits due to larger regulatory burden.
If the price of a car in the United States is $22,000, and the exchange rate between the dollar and the Japanese yen falls from 125 yen to 105 yen per dollar, then the price of the American car in Japan will
A. rise. B. fall. C. remain the same. D. be irrelevant, because the Japanese government will impose restrictions on imports from the United States.