A Microeconomic Analysis Shows That in a Competitive

question 42

Multiple Choice

A microeconomic analysis shows that in a competitive
Economy in which labor is homogenous and mobile, the
Ratio of the prices of the products in equilibrium is
Inversely proportional to:

• A)the ratio of the capital used in production.
• B)the ratio of the marginal products of labor.
• C)the geographical region of the country in which the factory is located.
• D)the strength of bargaining power of the workers.

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Definitions:

Inflation

The rhythm at which the universal cost metrics for goods and services advance, trimming down purchasing reach.

Annual Interest Rate

The percentage increase in money that borrowers pay lenders over a year, based on the original amount of the loan.

U.S. Income Tax System

The progressive tax system in the United States where taxes are based on income levels and include deductions and credits, resulting in varying rates.

Indexed for Inflation

A mechanism to adjust income payments or prices by taking into account the rate of inflation to preserve purchasing power.