Changes

9.  Suppose there is a sudden increase in the market price for a firm's widget.  The firm will hire more employees to produce more output until the point where the value of its marginal product of labor equals its _____________.  [Hint: the answer is NOT simply "marginal cost"].

9.  Suppose there is a sudden increase in the market price for a firm's widget.  The firm will hire more employees to produce more output until the point where the value of its marginal product of labor equals its _____________.  [Hint: the answer is NOT simply "marginal cost"].

:Marginal cost of labor[, the wage rate]. (Duncan)

:Marginal cost of labor. (Duncan)

:Match the marginal product of labor to the marginal cost of that same input, which is labor (Instructor)

:The wage rate, which is the marginal cost of labor.  Match the marginal product of labor to the marginal cost of that same input, which is labor (Instructor)

10.  Explain the following from the lecture: if inflation is 10% per year for three years, but one particular good keeps the same price during those three years, then its opportunity cost and real price actually decreased.

10.  Explain the following from the lecture: if inflation is 10% per year for three years, but one particular good keeps the same price during those three years, then its opportunity cost and real price actually decreased.