When a competitive firm maximizes profit, it will hire workers up to the point where the
a. marginal product of labor is equal to the product price.
b. marginal product of labor is equal to the wage.
c. value of the marginal product of labor is equal to the product price.
d. value of the marginal product of labor is equal to the wage.
d
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If the 2005 inflation rate in Canada is 4 percent, and the inflation rate in Mexico is 2 percent, then the theory of purchasing power parity predicts that, during 2005, the value of the Canadian dollar in terms of Mexican pesos will
A) rise by 6 percent. B) rise by 2 percent. C) fall by 6 percent. D) fall by 2 percent.
The best way to evaluate the effect of a specific tax is _____
a. to consider the tax in isolation b. to consider the tax in the context of the entire tax system c. to consider whether a tax is progressive, regressive, or proportional d. a and c
In the regression model Yi = β0 + β1Xi + β2Di + β3(Xi × Di) + ui, where X is a continuous variable and D is a binary variable, β3
A) indicates the slope of the regression when D=1. B) has a standard error that is not normally distributed even in large samples since D is not a normally distributed variable. C) indicates the difference in the slopes of the two regressions. D) has no meaning since (Xi × Di) = 0 when Di = 0.
Refer to the graph shown. The most economically efficient way to produce 500 units of output is to use:
A. 6 and 2/3 units of machines and 5 units of labor. B. 10 units of machines and 15 units of labor. C. 5 units of machines and 7.5 units of labor. D. 5 units of machines and 25 units of labor.