The marginal product of labor is the:
A. change in labor necessary to produce an additional unit of output.
B. cost of additional labor necessary to produce an additional unit of output.
C. change in output resulting from adding an additional unit of labor.
D. change in revenue resulting from adding an additional unit of labor.
Answer: C
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The service a homeowner performs when she mows her yard is not included in GDP because ________.
A. multiple counting would be involved B. this is a noninvestment transaction C. this is a nonproduction activity D. this is a nonmarket transaction
In a competitive labor market, a minimum wage law set above the equilibrium wage rate
A) creates a shortage of labor. B) causes equality between the quantity of labor supplied and the quantity demanded. C) creates a surplus of labor. D) lowers the wage rate paid to workers. E) has no impact.
Technical innovation spurs economic growth because it
A) increases labor productivity. B) increases the stock of capital goods. C) provides more powerful means of production. D) does all of the above.
In a competitive market without intervention, pure public goods would be
A. produced but at inefficiently high quantities. B. produced but at inefficiently low quantities. C. freely available. D. not produced.