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For a price ceiling to be binding constraint on the market the government must set it ?

Economics Mcqs, Prices, Wages & Taxes /
For a price ceiling to be binding constraint on the market the government must set it ?

A. above the equilibrium price
B. below the equilibrium price
C. precisely at the equilibrium price
D. at any price because all price ceilings are binding constraints

For a price ceiling to be binding constraint on the market the government must set it ? Read More »

Economics Mcqs, Prices, Wages & Taxes

Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ?

Economics Mcqs, Production Factors /
Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ?

A. Wages rise, and rental rates fall
B. Wages rise, and rental rates rise
C. Wages fall, and rental rates rise
D. Wages fall, and rental rates fall

Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ? Read More »

Economics Mcqs, Production Factors

A competitive profit-maximizing firm should hire workers up to the point where ?

Economics Mcqs, Production Factors /
A competitive profit-maximizing firm should hire workers up to the point where ?

A. the wage, the rental price of capital and the rental price of land are all equal
B. the marginal product of labor equals zero and the production function is maximized
C. the value of the marginal product of labor equals the wage
D. the marginal product of labor equals the wage

A competitive profit-maximizing firm should hire workers up to the point where ? Read More »

Economics Mcqs, Production Factors

An individual firm’s demand for a factor of production ?

Economics Mcqs, Production Factors /
An individual firm’s demand for a factor of production ?

A. Slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby reducing the value of the marginal producing the value of the marginal product as more of the factor is use
B. Slopes downward due to the factor’s diminishing marginal product
C. slopes upward due to the factor’s increasing marginal product
D. is perfectly elastic (horizontal) if the factor market is perfectly competitive

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Economics Mcqs, Production Factors

A decrease in the supply of farm tractors will cause all but which of the following ?

Economics Mcqs, Production Factors /
A decrease in the supply of farm tractors will cause all but which of the following ?

A. an increase in the rental rate for tractor
B. a decrease in the rental rate of farmland
C. a decrease in the value of the marginal product of tractors
D. an increase in the wage of farm workers

A decrease in the supply of farm tractors will cause all but which of the following ? Read More »

Economics Mcqs, Production Factors

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ?

Economics Mcqs, Production Factors /
What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ?

A. increase the demand for fishing boats and decrease rental rates on fishing boats
B. decreases the demand for fishing boats and increase rental rates on fishing boats.
C. decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry
D. increase the demand for fishing boats and increase rental rates on fishing boats

What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ? Read More »

Economics Mcqs, Production Factors

For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm’s ?

Economics Mcqs, Production Factors /
For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm’s ?

A. supply curve of capital
B. demand curve for capital
C. production function
D. marginal cost curve

For a competitive profit-maximizing firm, the value-of-the-marginal-product curve for capital is the firm’s ? Read More »

Economics Mcqs, Production Factors

If a factor exhibits diminishing marginal product, hiring additional units of the factor will ?

Economics Mcqs, Production Factors /
If a factor exhibits diminishing marginal product, hiring additional units of the factor will ?

A. cause a reduction is output
B. have no effect on output
C. increase the marginal product of the factor
D. generate ever smaller amounts of output

If a factor exhibits diminishing marginal product, hiring additional units of the factor will ? Read More »

Economics Mcqs, Production Factors

When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ?

Economics Mcqs, Production Factors /
When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ?

A. interest
B. dividends
C. increases in stocks of goods
D. retained earnings

When capital is owned by the firm as opposed to being directly owned by household capital income may take any of the following forms except ? Read More »

Economics Mcqs, Production Factors