If the wage that a competitive firm must pay its workers exceeds their value of marginal product, the firm will
A) decrease the quantity of labor it employs.
B) increase the quantity of labor it employs.
C) lower the price of the good.
D) raise the price of the good.
A
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If, in a competitive market, marginal benefit is greater than marginal cost
A) the quantity sold is less than the equilibrium quantity. B) the net benefit to consumers from participating in the market is greater than the net benefit to producers. C) the government must force producers to lower price in order to achieve economic efficiency. D) the quantity sold is greater than the equilibrium quantity.
Refer to Scenario 16.1. Initially Sam and Sally are allocated 10 cheese doodles and 10 pretzels each. Which of the following statements are TRUE?
A) The initial allocation is Pareto optimal as it is equitable. B) The initial allocation is Pareto optimal as Sally and Sam have equal amounts of both goods. C) The allocation is not Pareto optimal. An allocation that gave Sam all of the cheese doodles and Sally all of the pretzels would make both of them better off. D) The allocation is not Pareto optimal. An allocation that gave Sam four of the cheese doodles and sixteen of the pretzels (leaving Sally the rest) would make both of them better off.