The profit-maximizing firm equates the marginal benefit of labor to the marginal
Question 1The profit-maximizing firm equates the marginal benefit of labor to the marginal __________.
cost of labor
profit
units of labor
production
Question 2Salaries for professions (such as architect or medical doctor) that require a long period of study are typically higher than those for other jobs. The reasons for this are all of the following EXCEPT __________.
future income is worth less than present income
long periods of schooling incur greater current costs
status deserves more reward in the form of wages
students sacrifice a good deal of present income
Question 3In a perfectly competitive labor market, if a firm’s unit of labor adds more to revenue than to cost, it would be profitable for the firm to __________.
lower the price on each unit of product
add more buildings to the firm’s plant
add more capital to the firm
purchase more units of labor
Question 4Which of the following is NOT an example of an in-kind transfer?
unemployment compensation
food stamps
Medicaid
rent subsidies
Question 5The typical American worker tends to have the highest personal income in __________.
youth
the 20s to 30s
retirement years
middle age
The answer can be found in Chapter 13, Section 13.1, Personal Distribution of Income.
Question 6The poverty measure used in the United States includes all but which of the following as income?
Social Security payments
Temporary Assistance for Needy Families
food stamps
unemployment compensation
Question 7In many industrialized areas of the world, privatization has been the norm for about 30 years. In which of the following areas is this NOT the case?
China
France
Latin America
the United Kingdom
Question 8Monopoly rent seeking is a(n) __________.
efficient allocation of resources
extra cost of monopoly
benefit to society
advantage for large corporations
The answer can be found in Chapter 14, Section 14.2, Rent Seeking.
Question 9The “rent” involved in rent seeking __________.
represents a transfer from producer to government
is artificially created by a government or quasigovernment unit
represents a transfer from producer to consumer
is artificially created by a monopoly or oligopoly
Question 10The commitment of scarce resources to capture returns created politically is called __________.
rent seeking
cost minimizing
profit maximizing
logrolling
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