An Activity That Makes Some People Better Off and Nobody

question 139

Multiple Choice

An activity that makes some people better off and nobody worse off is a

• A) government transfer program such as Social Security.
• B) reduction in interest rates.
• C) price floor that increases income to suppliers.
• D) voluntary exchange.

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Definitions:

VMPL Curve

The VMPL curve, or the Value of Marginal Product of Labor curve, represents the additional value created by employing one more unit of labor, holding other inputs constant.

Market Wage Rate

The prevailing rate of pay for a specific job in the competitive labor market, determined by supply and demand for labor.

Labor

The human effort, including physical and mental exertion, used in the production of goods and services.

Marginal Product

Marginal product refers to the increase in output that results from employing one more unit of a particular input while keeping other inputs constant.