Firms have an incentive to substitute labor for capital as the
A. marginal product of labor decreases.
B. price of capital increases.
C. price of labor increases.
D. price of capital decreases.
Answer: B
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Compared to a competitive market, a firm that has a monopsony in a labor market would
A) hire fewer workers and pay higher wages. B) hire more workers and pay higher wages. C) hire more workers and pay lower wages. D) hire fewer workers and pay lower wages.
The U.S. Department of Agriculture defines the official poverty level as
a. the bottom 10 percent of the income distribution b. the poorest 2 million households c. income less than $15,000 d. income equal to three times the estimated cost of a nutritionally adequate diet e. being unemployed for more than two months
Define the following terms and explain their importance to the study of economics
a. poverty line b. economic discrimination c. optimal inequality d. negative income tax
Find the efficient level of abatement.
Suppose that the benefits and costs of water quality policy have been estimated as follows: MSB = 40 – 0.8A MSC = 10 + 0.2A TSB = 40A – 0.4A2 TSC = 10A + 0.1A2, where A is the percentage of pollution abatement and the benefits and costs are measured in thousands of dollars.