Marginal revenue product measures the:
A. amount by which the extra production of one more worker increases a firm's total revenue.
B. decline in product price that a firm must accept to sell the extra output of one more worker.
C. increase in total resource cost resulting from the hire of one extra unit of a resource.
D. increase in total revenue resulting from the production of one more unit of a product.
Answer: A
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The real business cycle model replicates the key business cycle regularities
A) both qualitatively and quantitatively. B) qualitatively but not quantitatively. C) quantitatively but not qualitatively. D) neither qualitatively nor quantitatively.
You are told that the price elasticity of demand for widgets is -0.75, the income elasticity of widgets is 2, and the cross-price elasticity of widgets and gadgets is 4. Carefully explain what information you can gather from each of these figures
What will be an ideal response?
If inflation was zero percent, nominal interest rates would be:
A. equal to real interest rate. B. larger than real interest. C. smaller than real interest. D. at the optimal rate.
Critics of free trade sometimes argue that allowing imports from foreign countries causes a reduction in the number of domestic jobs. An economist would argue that
a. foreign competition may cause unemployment in import-competing industries, but the effect is temporary because other industries, especially exporting industries, will be expanding. b. foreign competition may cause unemployment in import-competing industries, but the increase in consumer surplus due to free trade is more valuable than the lost jobs. c. the critics are correct, so countries must protect their industries with tariffs or quotas. d. foreign competition may cause unemployment in import-competing industries, but the increase in the variety of goods consumers can choose from is more valuable than the lost jobs.