Exhibit 10-5 A perfectly competitive labor market
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Quantity of Labor
(thousands)
Marginal Revenue Product
Wage Rate 5 $25.00$ 5.00 10 20.0010.00 1515.0015.00 2010.0020.00 255.0025.00?
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In Exhibit 10-5, when the marginal revenue product is $20.00, firms should
A. continue hiring workers.
B. stop hiring workers.
C. start firing workers.
D. pay a wage above $15.00 to its workers
Answer: A
Economics
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In the above figure, what would result if the price was $40?
A) a surplus B) a shortage C) equilibrium D) excess demand
Economics
In the intermediate range of the aggregate supply curve, if government spending increases caused the aggregate demand curve to shift outwards, which of the following ismostlikely to occur?
A. The price level and real GDP will both rise. B. The price level will not change, but real GDP will increase. C. The price level will rise, but real GDP will not change. D. Both the price level and real GDP will not change.
Economics