Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. Harry should
A. not hire the second barber because he is less productive than the first barber.
B. hire the second barber because he will add $108 to profits.
C. not hire the second barber because he will diminish profits.
D. hire the second barber because he will add $28 to profits.
Answer: D
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Assume the economy is closed and that it is operating at full employment. Which statement is TRUE when the size of the budget deficit decreases?
A) The increased amount of public goods will crowd out privately produced goods. B) A reduction in the growth of productivity, and a reduction in society's standard of living will occur. C) The interest rate will decrease, leading to an increase in investment and capital formation. D) Demand and supply of credit will increase.
Refer to Table 4-4. If a minimum wage of $10.00 is mandated there will be a
A) shortage of 20,000 units of labor. B) surplus of 40,000 units of labor. C) shortage of 40,000 units of labor. D) surplus of 20,000 units of labor.