Under certain conditions, the slope of the marginal revenue product curve reflects the combined effects of diminishing marginal returns and a declining price of the product the firm sells. What are these conditions?
a. The firm must be a price searcher in both the product market and the resource market.
b. The firm must be a price searcher in the product market, regardless of whether it is a resource price searcher.
c. The firm must be a price searcher in the product market but not necessarily in a perfectly competitive resource market.
d. The firm must be a price searcher in a perfectly competitive product market.
e. The firm must operate in a decreasing-cost industry.
B
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Which of the following is an advantage of starting a new business as a sole proprietorship?
A) The owner has limited personal liability. B) Business profits are not taxed. C) A sole proprietorship has few government rules and regulations to comply with. D) A sole proprietorship can easily attain additional funding.
For a macroeconomist, the case for aggregation is based on two principles—(1) the composition of demand and supply may not matter for some purposes and (2)
A. during fluctuations markets normally move together. B. individual markets allocate resources efficiently. C. inflation, unemployment, and growth never go together. D. individual markets distribute income efficiently.
Explain what effect an increase in the unemployment rate will have on the real wage based on: (1 ) the WS relation; and (2 ) the PS relation
What will be an ideal response?
If, as a result of imperfect information, firms set their wage rates ________ the market clearing wage rate, there will be a surplus of workers.
A. below B. at C. above D. above or below