Because of voter rational ignorance, the government might not produce the efficient quantity of a public good.
Indicate whether the statement is true or false
Ques. 2Explain why the availability of resources affects the elasticity of supply.
What will be an ideal response?
Ques. 3Because the marginal cost of labor curve lies above the labor supply curve, a monopsony will pay a wage that is
A) equal to the wage paid in a competitive market.
B) equal to value of marginal product.
C) greater than value of marginal product.
D) less than the wage paid in a competitive market.
Ques. 4The above figure shows the demand and supply curves for high-skilled and low-skilled labor. The wage differential between high-skilled and low-skilled labor is
A) 4.00.
B) 5.00.
C) 6.00.
D) 7.00.
Ques. 5If Hong Kong continues to devote more resources to accumulating capital than the United States, Hong Kong will continue to grow more rapidly than the United States.
Indicate whether the statement is true or false
Ques. 6If Rachel is at her best affordable point, then ________.
A) her marginal rate of substitution equals 1
B) her marginal rate of substitution is maximized
C) the relative price of the goods she buys equals the marginal rate of substitution
D) she is indifferent among other points on her budget line
Ques. 7The commercial banks in Fundland have
Reserves 500 million
Loans 3,500 million
Deposits 4,000 million
Total assets 5,000 million
The banks hold no excess reserves.
a) Calculate the banks' desired reserve ratio.
b) An immigrant arrives in Fundland with 10 million, which she deposits in a bank. How much does the immigrant's bank lend initially?
Ques. 8Dole Co operates in a monopolistically competitive market. To try to earn an economic profit, Dole Co will
A) prevent other firms from entering the market.
B) increase its product's price.
C) continually seek to differentiate its product.
D) increase output.
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