Firms use information on labor's marginal revenue product to determine
A) how much marginal product to produce at each wage rate.
B) how many workers to hire at each wage rate.
C) how much to produce at each output price.
D) how much labor services to supply at each wage rate.
B
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Refer to Market Diagram. Suppose this firm initially acted competitively. If the firm switched to the monopoly equilibrium, how much deadweight loss would be created?
The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.
a. Area E + H.
b. Area G + H.
c. Area B + D + E + G + H.
d. Area D + E + G + H.
The aggregate demand curve shows
a. the quantity of goods and services that households, firms, and the government want to buy at each price level. b. the quantity of goods and services that households, firms, and the government want to buy at each interest rate. c. the quantity of goods and services that households (not firms) want to buy at each price level. d. the quantity of goods and services that firms (not households) want to buy at each interest rate. e. none of the above.
Finding the occupation or business activity in which you are relatively more productive helps you earn more money than otherwise would be the case. This reflects the
A) principle of compound interest. B) law of diversification. C) law of large numbers. D) law of comparative advantage.
Politicians often instruct households to spend in order to help the economy. This advice overlooks the fact that
a. increases in consumption will make it easier for households to deal with unanticipated future expenses.
b. increases in consumption will provide more loanable funds for investment.
c. you cannot have a strong economy if all or most households are spending just about everything they earn.
d. consumer spending is less than two-thirds of GDP.