Marginal revenue product
A. increases when marginal product decreases.
B. eventually increases as labor input increases.
C. measures the benefit to the firm from hiring an additional unit of labor.
D. is calculated as the marginal product of labor divided by the price of output.
Answer: C
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The natural rate of unemployment is equal to the unemployment rate when there is only:
A. structural and frictional unemployment. B. frictional unemployment. C. cyclical unemployment. D. structural and cyclical unemployment.
Refer to Figure 2-15. In the circular flow diagram, economic agents M represent
A) firms. B) product markets. C) factor markets. D) households.
Individuals are forced to make choices because
a. wants are unlimited. b. the supply of resources is infinite. c. wants are unlimited and resources are scarce. d. resources exceed wants.
Which of these contributes to the existence of monopoly power?
a. the control of critical resources b. legal barriers c. patents d. All of the above contribute to the existence of monopoly power.