In a machine shop, the marginal physical product of an additional unit of labor is 4 units of output, while the marginal physical product of an additional piece of machinery is 2, under what conditions would the firm increase labor usage?
A. It would increase labor usage if the wage rate is more than twice the unit price of a piece of machinery.
B. It would increase labor usage if the wage rate is less than twice the unit price of a piece of machinery.
C. It would increase labor usage as long as the wage rate is less than the unit price of a piece of machinery.
D. It would not increase labor usage under any scenario.
Answer: B
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A) 1960s B) 1990s C) 2000s D) 1970s
The oldest central bank, having been founded in 1694, is the
A) Bank of England. B) Deutsche Bundesbank. C) Bank of Japan. D) Federal Reserve System.
Writing in The Wall Street Journal in 2009, economist Jeremy Siegel pointed out that the efficient markets hypothesis
a. was responsible for the financial crisis of 2008-2009. b. was responsible for the Great Depression of the 1930s. c. claims that prices observed in financial markets are always "right.". d. claims that prices observed in financial markets are mostly "wrong.".
Suppose that interest rates are expected to remain unchanged over the next few years. However, there is a risk premium for longer-term bonds. According to the liquidity premium theory, the yield curve should be:
A. upward sloping and relatively flat. B. inverted. C. vertical. D. upward sloping and very steep.