A monopsony pays a wage rate ________ the marginal cost of labor and ________ the value of marginal product of labor
A) equal to; equal to
B) lower than; lower than
C) equal to; lower than
D) lower than; equal to
B
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Answer the following questions true (T) or false (F)
1. As spending on government purchases increases, income rises and money demand falls. 2. An increase in government spending will force an appreciation of the dollar, which causes net exports to fall. 3. An increase in government spending lowers interest rates and increases the rate of investment in new capital.
Properties of long-run competitive equilibrium with free entry include:
A. an equilibrium price equal to the minimum AC. B. firms earning zero profits. C. active firms producing at their efficient scales of production. D. All of these are properties of long-run competitive equilibrium.