Suppose a firm uses land, labor, and capital for its production process. If it is renting the equilibrium quantity of all three factors of production, then which of the following conditions will hold?
A) Marginal product from the last dollar spent on land = Marginal product from last dollar spent on labor > Marginal product from the last dollar spent on capital
B) Marginal product from the last dollar spent on land > Marginal product from last dollar spent on labor > Marginal product from the last dollar spent on capital
C) Marginal product from the last dollar spent on land > Marginal product from last dollar spent on labor = Marginal product from the last dollar spent on capital
D) Marginal product from the last dollar spent on land = Marginal product from last dollar spent on labor = Marginal product from the last dollar spent on capital
D
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For a monopsony, the labor supply curve
A) lies above the MCL curve. B) is the same as the MCL curve. C) lies below the MCL curve. D) is the same as the labor demand curve.
Suppose one is offered a gamble in which you win $1,000 half the time but lose $1,000 half the time. Since in this case one is as likely to win as to lose the $1,000, the average payoff on this gamble—its expected value—is:
0.5 ? $1,000 + 0.5 ? (-$1,000 ) = 0. Under such circumstances: A) no one will take the gamble. B) risk averse individuals will take the gamble. C) risk lovers individuals will not take the gamble. D) risk neutral individuals will not take the gamble. E) risk lovers and risk neutral individuals may take the gamble.
Inflation ________ the signals sent by price changes to demanders and suppliers of goods and services.
A. obscures B. amplifies C. enhances D. has no impact on
In an open economy, the domestic real interest rate is determined by:
A. domestic investment. B. domestic saving and net capital inflows. C. domestic saving and domestic investment. D. domestic saving, domestic investment, and net capital inflows.