The derived demand and, consequently, the demand curve for labor are determined by
a. labor's wage.
b. labor's marginal revenue.
c. the marginal cost of the input labor.
d. labor's marginal revenue product.
d
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Why do higher interest rates increase adverse selection problems in the loan market?
A) Higher interest rates reduce the gains from economies of scale. B) As interest rates rise, the creditworthiness of the average loan applicant declines. C) Higher interest rates reduce information problems in the loan market. D) At higher interest rates fewer investment projects are profitable.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index falls, and reserve-related (central bank) transactions remain the same. c. The GDP Price Index and reserve-related (central bank) transactions remain the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Which of the following statements is true of capital gains in the U.S.?
A. Capital gains are taxed only if they are long-term. B. Capital gains are taxed only for low-income groups. C. Capital gains are taxed on accrual. D. Capital gains are forgiven at death.
Answer the following statement(s) true (T) or false (F)
1. You can increase your total satisfaction by buying goods with lower marginal utility at a higher price. 2. Sometimes when you buy additional units of one good and its marginal utility decreases, the marginal utility of the goods you did not buy increases. 3. If marginal utility is held constant, consumer equilibrium can be maintained even if the price of certain goods fall. 4. Behavioral economics draws on human psychology. 5. Behavioral economists assume consumers are always rational and informed.