Set of Multuple Choice Q\'s 1. A factor exhibits diminishing marginal productivi

Question

Set of Multuple Choice Q's

1. A factor exhibits diminishing marginal productivity if employing additional units of the factor reduces output.

A. True B. False

2. Firms are willing to pay more for workers with greater human capital because workers with greater human capital have a greater marginal product.

A. True B. False

3. If the signaling view of education is true, a policy of increasing the education of workers will increase the wages of all workers.

A. True B. False

4. High land values in a desirable place to live (like San Diego) would likely lead to higher density if market forces were the only consideration.

A. True B. False

5. To an economist, the factor payment to a top manager is the wage.

A. True B. False

Explanation / Answer

a) "True"

as a firm employ more and more people the marginal productivity of labor decreases other variables also face the same phenomena.

b) "True"

A person who is more skilled i.e. have more human capital will be more productive for the company so he will be paid more.

c) "False"

If all the workers are equally educated their supply will be more than ever this will drag the price down and they will get fewer wages.

d) "False"

If everybody is going to live in San Diego the land and prices of other resources will skyrocket due to high demand and keep market force in account this will force people with fewer resources out.

e) "True"

For an economist, every payment done for any kind of labor is wages or compensation.

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