The marginal cost of labor for a perfectly competitive firm is the
a. change in total revenue that results from employing an additional worker
b. wage rate
c. marginal revenue product curve
d. demand curve for labor
e. marginal physical product of labor
B
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If AC < p where MR = MC
A) firms earn positive profits and new firms will enter. B) firms earn negative profits and existing firms will leave. C) firms earn zero profits and new firms will not enter and no existing firms will leave. D) None of the above.
The prices of related goods matters when determining supply because it affects:
A. the opportunity cost of production. B. whether or not your good will sell. C. the competition in the market. D. the availability of substitute goods.
In order for the law of diminishing returns to be present, we must have
a. at least one factor of production to be fixed. b. output decreasing as more laborers are hired. c. the price of labor increasing as more workers are hired. d. simultaneous changes in labor and capital. e. double the output when labor input is doubled.
What happens as the result of a shortage?
A) There is downward pressure on prices. B) There is upward pressure on prices. C) Consumers begin to view the good as an inferior good because they have a hard time finding it. D) Supply of the good decreases.