A common approach that economists use to understand, explain and predict economic phenomena is to
A) form a theory or model.
B) conduct experiments in a science lab.
C) ask what people think.
D) examine people's thought processes.
A
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In the above figure, if the demand curve is D2, then
A) the equilibrium price will be P1 and the equilibrium quantity will be Q2. B) the equilibrium price will be P1 and the equilibrium quantity will be Q1. C) there will be a shortage equal to Q2 - Q1. D) an increase in price will shift the demand curve to D3.
Your boss wants to know if you should lay off any workers. You answer that you should lay off workers if the
A) marginal revenue product of labor is greater than the nominal wage rate. B) marginal product of labor is greater than or equal to the real wage rate. C) marginal revenue product of labor is equal to the nominal wage rate. D) marginal product of labor is less than the real wage rate.