The wage rate for widget makers is currently $25 per hour and Ajax hires 20 widget makers. If the wage rate were decreased to $20, what would happen to the marginal revenue product for labor at Ajax?
A) It would remain the same.
B) It would increase since Ajax's demand for labor curve will shift.
C) It would increase since the price of widgets would decrease.
D) It would decrease since Ajax will hire more workers.
Answer: D
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When the nominal exchange rate falls
A) the domestic currency buys more units of foreign currency and the domestic currency has depreciated. B) the domestic currency buys fewer units of foreign currency and the domestic currency has depreciated. C) the domestic currency buys more units of foreign currency and the domestic currency has appreciated. D) the domestic currency buys fewer units of foreign currency and the domestic currency has appreciated.
If Congress were to pass a law exempting interest on saving from taxation, the:
A. supply of loanable funds would decrease and the equilibrium interest rate rise. B. supply of loanable funds would increase and the equilibrium interest rate fall. C. demand for loanable funds would increase and the equilibrium interest rate rise. D. equilibrium interest rate would be unaffected.