Refer to Scenario 3 . If half the workers build huts and half of the workers gather coconuts, what would be the production on the island?
What will be an ideal response?
In one day, the inhabitants would produce three huts and 75 coconuts.
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A large aircraft manufacturer, like Boeing, may have a cost advantage over a new smaller manufacturer because of:
a. diseconomies of scale. b. economies of scale. c. diminishing returns to a fixed factor of production. d. the principal agent problem is generally less severe for larger firms.
Explain the concept of 'creative destruction' by innovation. Does it ensure positive economic profits in the long run?
If coal and oil are substitute inputs in the production of electricity, an increase in the price of oil
a. will increase the demand for coal. b. will reduce the demand for coal. c. will increase the supply of coal. d. will reduce the supply of coal. e. will not affect the demand for coal.
If the marginal product of labor is less than the average product of labor, then the
A. marginal product must be increasing. B. marginal product must be decreasing. C. average product must be decreasing. D. Both B and C