Give an example of a firm that is experiencing negative marginal product and explain how the firm could change this situation.
What will be an ideal response?
Students should make clear they understand that negative marginal product occurs when using additional variable input units causes total product to fall, and that the way to resolve this situation is to reduce input units. For example, a construction company could experience negative marginal product if it sent so many extra workers to a job site that they were getting in each other’s way and causing accidents. Sending some of the extra workers home would remedy the situation.
You might also like to view...
Economists consider profit to be
A) a cost of producing goods and services. B) something that should be eliminated by antitrust laws. C) the same as a salary. D) a reward for incurring losses.
Communities may form competitive markets for providing certain types of non-pure public goods. ?
Answer the following statement true (T) or false (F)
Briefly explain how the concept of rational ignorance explains the tendency many people have not to learn about political candidates
What will be an ideal response?
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Mr. Lingle's budget constraint is AC. Point C is
A. not in Mr. Lingle's opportunity set but is on his budget constraint. B. an available option and Mr. Lingle does not spend all of his income. C. an available option and Mr. Lingle exactly spends all of his income. D. not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.