Minimax Motors, a car manufacturer, can produce 1,200 cars per week in its new plant that has 25 assembly lines and 450 workers. If Minimax Motors adds 50 new workers to their plant, it can produce 1,300 cars per week. This decrease in average productivity occurs because of:
a. diminishing marginal returns of workers
b. diminishing marginal returns of assembly lines.
c. diminishing marginal returns of both workers and assembly lines.
d. diminishing marginal returns of the management team.
a
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Suppose the value of the CPI is 1.100 in year one, 1.160 in year two, and 1.270 in year three. Assume also that the price of computers increases by 3% between year one and year two, and by another 3% between year two and year three. The price level is increasing, the inflation rate is ________, and the relative price of computers is ________.
A. increasing; decreasing B. constant; increasing C. increasing; increasing D. constant; decreasing
Labor productivity rises when
A) average worker output rises. B) nominal wages fall. C) average worker output falls. D) business investment falls.
If Alex seeks to maintain a constant income level, and all workers in his industry, including Alex, get a wage increase, which of the following will always be true?
A. The substitution effect of the wage increase leads to less work B. The market supply of labor curve will be backward bending for Alex's type of work C. The income effect of the raise causes Alex to work more D. Alex will have a backward bending supply curve for his labor
Disposable income is defined to be:
A. total income plus taxes. B. total income minus depreciation. C. total income minus taxes. D. All of these are true.