Lauren runs a chili restaurant in San Francisco. Her total revenue last year was $110,000. The rent on her restaurant was $48,000, her labor costs were $42,000, and her materials, food and other variable costs were $20,000. Lauren could have worked as a biologist and earned $50,000 per year. An economist calculates her implicit costs as _____
A. $20,000
B. $30,000
C. $40,000
D. $50,000
Ans: D. $50,000.
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A profit-maximizing firm in a competitive market will continue to hire more workers when
A) the marginal factor cost exceeds the marginal revenue product of the additional workers. B) the marginal factor cost equals the marginal revenue product of the additional workers. C) the marginal factor cost is less than the marginal revenue product of the additional workers. D) the marginal factor cost is less than zero.
Briefly explain the reason for the Law of Increasing Opportunity Cost.
What will be an ideal response?
Which of the following is a monetary policy tool that is meant to reduce interest rates and stimulate the economy?
a) Easy money b) Tight money c) Restrictive monetary policy d) Contractionary monetary policy
When wages increase, the income effect of labor supply ________ the quantity of labor supplied because ________.
A. reduces; the price of leisure has increased B. reduces; workers acquire more of all normal goods (including leisure) when income increases C. increases; the value of working has increased D. increases; the price of leisure has increased