Which of the following could explain an increase in labor supply to a particular labor market?
a. a reduced preference for this type of work
b. a decrease in the size of the population
c. an increase in the number of firms in the market
d. a rightward shift of the marginal revenue product curve for labor at a typical firm
e. a reduction in wage rates for similar types of work
E
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In a market economy, uncertain levels of inflation
A) make prices less useful as signals for resource allocation. B) prompt firms to enter into fewer short-term contracts, and more long-term contracts, with suppliers. C) balance out income redistribution in the long run. D) are more beneficial to lenders than to borrowers, as lenders have a tendency to overestimate the expected inflation rate.
Consider the following short-run production function: q = 5L2 - 1/3 L3. At what level of L do diminishing marginal returns begin? At what level of L do diminishing returns begin?
What will be an ideal response?