The division of labor and specialization explain
A) why, when the marginal product of labor increases, so does the average product of labor.
B) why the average product of labor falls when firms use more capital or change the layout of their businesses.
C) why the marginal product of labor rises as a firm hires its first units of labor.
D) why firms may find it profitable to use more workers when the marginal product of labor is negative.
Answer: C
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The demand for dollars in the foreign exchange market will increase (so that the demand curve shifts rightward) if
A) the U.S. interest rate differential falls. B) the expected future exchange rate falls. C) the exchange rate for the dollar falls. D) None of the above answers is correct.
If the supply of labor to a monopsonist is everywhere unit elastic, and the marginal expenditure equals $1, then the wage will equal
A) $0.50. B) $0.75. C) $1.00. D) $2.00.
Which of the following statements is true?
A. Leverage increases expected return and increases risk. B. Leverage increases expected return and reduces risk. C. Leverage decreases expected return and increases risk. D. Leverage decreases expected return but has no effect on risk.
Suppose the economy is initially in the steady state. A reduction in the depreciation rate (?) will cause
A) an increase in K/N. B) an increase in Y/N. C) an increase in C/N. D) all of the above E) none of the above