In a competitive labor market a firm will continue to employ workers for as long as an additional ...

In a competitive labor market a firm will continue to employ workers for as long as an additional worker's marginal revenue product is below the wage rate.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 2

The combined effect of changes in government purchases and net taxes can be determined by adding their individual effects.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 3

Real gross domestic product (GDP) is measured in terms of _____.
 a. current-year prices
 b. base-year prices
 c. foreign currencies
 d. the quality of goods produced
  e. hours of employment

QUESTION 4

In a competitive labor market, the demand for labor X that produces product Y will increase if the demand for product Y increases.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 5

A 100 billion increase in government purchases will have the same effect on real GDP as a 100billion decrease in net taxes.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 6

In a competitive labor market, marginal revenue product equals marginal product times the wage rate.
 a. True
  b. False
  Indicate whether the statement is true or false

QUESTION 7

The Consumer Price Index (CPI) is a measure of the:
 a. cost of a market basket of consumer goods and services relative to its cost in a base year.
  b. change in the average price of a market basket of necessary goods and services.
 c. cost of a market basket of consumer goods relative to the previous year.
 d. change in the average price of all intermediate goods and services.
 e. average price of all final goods and services relative to the average price in the previous year.

QUESTION 8

Most government purchases are made at the federal level and not at the state level.
 a. True
  b. False
  Indicate whether the statement is true or false