In the Ricardian model, the marginal product of labor:
a. first rises, then falls, as more labor is employed to produce a good.
b. first falls, then rises, as more labor is employed to produce a good.
c. continuously falls, as more labor is employed to produce a good.
d. does not change, as more labor is employed to produce a good.
Answer: d. does not change, as more labor is employed to produce a good.
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In recent years, the fertility rate in developing countries has been
(a) declining. (b) holding steady. (c) increasing. (d) showing no particular pattern.
The difference between the gross public debt and the net public debt is that the
A) gross public debt includes entitlements while the net public debt does not. B) gross public debt is based on budget deficit while the net public debt is not based on budget deficits. C) gross public debt includes government interagency borrowing while the net public debt does not. D) the gross public debt is expressed as a percentage of GDP while the net public debt is not.
Comparative advantage indicates that:
A. specialization and exchange will permit trading partners to maximize their joint consumption. B. a nation can gain from trade only if it is not at an absolute disadvantage in producing all goods. C. a nation can gain from trade only when its trading partners are not low-wage countries. D. countries should export products for which they are high-opportunity cost producers.
When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease. B. prices, causing them to definitely rise. C. output, causing it to definitely increase. D. prices, causing them to definitely fall.