A firm hires some number of custodians to clean a large warehouse. When only a few custodians are hired, they can quickly find and remove a lot of dust and debris. As the number of custodians increases, additional custodians have to go to greater
lengths and spend more time to find and remove additional dust and debris. What property of production functions is relevant to the custodians' situation?
The property is diminishing marginal product (of labor).
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An increase in the unemployment rate which is accompanied by an increase in the inflation rate is represented by a ________ the Phillips curve
A) movement down B) movement up C) upward shift of D) downward shift of
If clerical workers in your state voted to have a union represent them in negotiations with employers, they would have monopoly power in wage determination
Employers would be in no position to exert monopsony power in their employment of clerks in this market due to the large number of employers in the market. Labor supply is given by LS = 50W - 100 (or, equivalently W = LS/50 + 2 ) Labor demand is given by LD = 700 - 25W (or, equivalently W = -LD/25 + 28 ) a. What is the equation for marginal revenue? b. Using the supply and demand equations, compute the wage rate and number of workers that would be hired when there is no union representation. c. Using the supply and demand equations, compute the wage rate and number of workers hired when the union represents workers and acts to maximize aggregate wages to all workers hired. d. Explain the impact of (c) on the competitive market.
For the Fed, price stability means a low and stable rate of inflation
a. True b. False
When new firms have an incentive to enter a competitive price-taker market, their entry will
a. increase the price of the product. b. drive down profits of existing firms in the market. c. shift the market supply curve to the left. d. increase demand for the product.