The marginal benefit of a worker to a firm is the value of the extra output that results
when
A) some workers are laid off and the remaining workers become more productive.
B) an additional worker is hired.
C) workers get paid for working overtime.
D) work is outsourced to a foreign country.
Recall Application 3, “The Links Between Self-Reported Happiness and GDP,” to
answer the following questions:
According to the Application 3, at any point in time both income and a stable marriage
tend to increase self-reported happiness, with research indicating that a stable marriage
is equivalent to income of:
A) $5,000.
B) $25,000.
C) $58,000.
D) $100,000.
Auction prices are prices that adjust ________ while custom prices are prices that
adjust ________.
A) quickly; slowly
B) quickly, quickly
C) slowly; slowly
D) slowly; quickly
Figure 2.3 In Figure 2.3, point B:
A) implies unemployment of some resources.
B) is the optimum.
C) cannot be produced.
D) all of the above.
An increase in a country’s capital stock relative to its work force is known as
A) capital deepening.
B) capital growth.
C) capital improvement.
D) capital augmentation.
If interest rates increase, people will choose to hold:
A) more bonds and less cash.
B) less bonds and less cash.
C) less bonds and more cash.
D) more bonds and more cash.
The Law of Demand can be explained as
A) a lot of people wanting the same thing.
B) the higher the price, the smaller the quantity demanded, ceteris paribus.
C) people are willing to make limited sacrifices to acquire products.
D) legal reasons people make purchases in the marketplace.
From the beginning of the 1990s to the year 2000, investment spending as a share of
U.S. GDP has tended to
A) increase.
B) decrease.
C) remain the same.
D) fluctuate wildly.
The fraction of the working-age population that is in the labor force is called the
A) employment rate.
B) unemployment rate.
C) labor force participation rate.
D) nonresponse rate.
Recall Application 3, “The Financial System Under Stress: September 11, 2001,” to
answer the following questions:
In order to provide liquidity to the economy after the September 11, 2001, terrorist
attacks against the United States, the Fed:
A) purchased government securities in the marketplace.
B) increased the length of the “Federal Reserve float.”
C) increased direct lending to commercial banks.
D) all of the above
To reduce labor costs, companies often invent machines and methods to produce
products and reduce the amount of labor required. This is called
A) downsizing.
B) induced innovation.
C) failed labor utilization.
D) anti-union.
Which of the following assets is the least liquid?
A) currency
B) checking accounts
C) stocks
D) real estate
Recall the Application about the number of homeowners in the year 2012 who owed
more on their homes than their homes were worth to answer the following question(s).
To assist homeowners who are behind on their payments and may eventually lose their
homes to foreclosure, many in Congress have advocated for reduction on the amount of
money they actually owe€or principal reduction. The hope is that with a reduction in
the amount they owed they would start making timely payments on their mortgages and
avoid a messy default.This Application addresses the concept of
A) the down-side of leverage.
B) increases in consumer wealth.
C) inflation and the housing boom.
D) the dangers of high interest rates.
Table 2.3 The firm depicted in Table
2.3 is facing diminishing returns because:
A) capital and labor are both fixed.
B) capital and labor are both variable.
C) capital is fixed.
D) the number of workers can only be increased to 5.