If a good had a zero price (i.e., the good was free), a rational person would consume
A. The good until the marginal utility was maximized.
B. The good until total utility was zero.
C. An infinite amount of the good.
D. The good until the marginal utility of the last unit was zero.
Answer: D
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Suppose a union successfully negotiates for its members a wage rate that is above the competitive wage rate, then
A) there will be a surplus of jobs. B) antitrust laws become effective. C) there will be downward pressure on the wage rate until equilibrium is established. D) there will be an excess supply of labor.
If an increase in a person's income causes that person to buy more apples, then apples are
a. neutral with respect to price b. complements c. inferior goods d. normal goods e. substitute goods
A factor is endogenous when:
a. It fluctuates in a narrow band around its long term value. b. It is not determined by the forces of supply and demand in any of the three macroeconomic markets. c. It is determined by the forces of supply and demand in any of the three macroeconomic markets. d. It is under full control by the central bank and/or the government. e. The central bank and the government have no means to influence it.
People are willing to invest in human capital because
a. the demand for skilled labor is higher than for unskilled labor. b. it increases the marginal product of their labor. c. firms are willing to pay more for more productive workers. d. All of the above are correct.