Assume that labor is the only variable input and that the payment made to labor is denoted as W. The ________ can be stated as W/MC.
A. marginal revenue product of labor
B. total revenue from labor
C. total cost of labor
D. marginal product of labor
Answer: D
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Suppose that the MPC out of disposable income was 0.8 and the marginal tax rate was 0.25 for a given economy. In this case, the value of the tax multiplier in the simple Keynesian model would be
a. 1. b. -2. c. 2.5. d. 2. e. none of the above.
Which of the following is not a determinant of Investment spending?
A. Real income B. Expected profitability C. Interest rates D. Taxes
Oligopoly can arise from:
a. diseconomies of scale in production. b. limited demand for a product in the market. c. government regulations. d. easy availability of the crucial inputs. e. reduction of trade barriers.
In an effort to prepare for war, the Defense Department is required by Congress to stockpile helium, once used to provide lift for blimps (phased out in the 1960s). About 100 years of total U.S. usage of helium is in storage. The Pentagon agrees to buy helium from producers at a price above what would otherwise prevail in the marketplace. Is this likely to result in efficiency? Explain.
What will be an ideal response?