The base year for a price index is the year_____.
a. in which prices were lowest
b. in which prices were highest
c. in which real output was the largest
d. in which prices were stable
e. that serves as a reference point
QUESTION 2Suppose a monopsonist wants to hire more workers. If it has to pay the same wage to all of its workers, the:
a. marginal factor cost will fall while the wage will rise.
b. wage will fall while the marginal factor cost will rise.
c. difference between the wage and marginal factor cost will become smaller.
d. difference between the wage and the labor supply curve will increase.
e. wage and the marginal factor cost will increase.
QUESTION 3During an election year, the federal government would mostly likely increase _____.
a. tax rates
b. interest rates
c. the discount rate charged to commercial banks
d. the minimum reserve requirement of commercial banks
e. government purchases of goods and services
QUESTION 4Nominal gross domestic product (GDP) is measured in terms of the _____.
a. current-year prices
b. base-year prices
c. export of goods and services
d. amount of taxes collected
e. hours of employment
QUESTION 5A monopsonist can pick the ____, while a monopolist can pick ____.
a. the price it will charge; the wage it will pay
b. the wage it will pay; the price it will charge
c. the market price for its output; the quantity it will produce
d. marginal product of labor; the marginal cost of labor
e. number of competitors; the number of buyers
Quick Reply
