1.A firm hires labor up to the point where the
Question 19 options:
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1)
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real wage rate equals the nominal wage rate. |
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2)
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additional hour of labor produces extra output that equals the
real wage rate. |
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3)
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additional hour of labor produces extra output that equals the
nominal wage rate. |
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4)
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firm can sell the extra output. |
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2.An increase in the quantity of investment demanded (demand for
loanable funds) occurs when
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1)
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the real interest rate falls. |
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2)
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the real interest rate rises. |
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3)
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the supply of saving decreases. |
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4)
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None of the above answers is correct. |
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3.The marginal cost of a good is defined as
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1)
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the dollar cost of a good. |
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2)
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what you must give up to get one more unit of something. |
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3)
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what you are willing to give up to get one more unit of
something. |
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4)
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the value of all the alternatives forgone. |
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4. The standard of living increases when
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1)
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the number of people employed increases |
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2)
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productivity increases |
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3)
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prices and wage rates rise |
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4)
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the cost of living rises |
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5. Between Tom and Jerry, Tom has a comparative advantage in
producing a good if
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1)
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Tom can produce more of the good than can Jerry. |
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2)
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Tom has more productive resources than Jerry. |
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3)
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Tom has a lower opportunity cost of production than does
Jerry. |
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4)
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None of the above describes when Tom has a comparative
advantage. |
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Question
6. By specializing in the production of the good in which each
producer has a comparative advantage, and then trading that good
with other specialized producers,
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1)
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only the producer with the lowest opportunity cost will benefit
from trade. |
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2)
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only the producer with the highest opportunity cost will
benefit from trade. |
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3)
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all producers will be better off. |
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4)
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only the producer with the highest comparative advantage will
benefit from trade. |
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