The long-run supply curve under pure competition will be:
A. Downward-sloping in a decreasing-cost industry and upward-sloping in an increasing-cost industry
B. Horizontal in a constant-cost industry and downward-sloping in an increasing-cost industry
C. Vertical in a constant-cost industry and upward-sloping in a decreasing-cost industry
D. Upward-sloping in an increasing-cost industry and vertical in a constant-cost industry
A. Downward-sloping in a decreasing-cost industry and upward-sloping in an increasing-cost industry
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As you move down the production possibility frontier, the absolute value of the marginal rate of transformation
A. increases. B. initially decreases, then increases. C. decreases. D. initially increases, then decreases.
Where should a producer stop devoting more of his spending on labor if initially the MRP of the additional dollar spent on labor is higher than the MRP of the additional unit spent on tools?
A. MRP/$ of additional labor falls below MRP/$ of additional tools. B. MRP/$ of additional capital increases above MRP/$ of additional tools. C. MRP/$ of additional labor becomes equal to MRP/$ of additional tools. D. MRP/$ of the additional labor falls to zero.
If a firm faces a labor supply curve that is positively sloped, then the marginal cost of labor curve
A) equals the wage rate. B) equals the minimum wage. C) lies above the value of marginal product curve. D) lies above the labor supply curve.
To calculate the cost of capital
A) it needs to know its economic profit. B) the firm must calculate the average weighted cost of debt. C) the firm needs to know how much debt it uses. D) the firm needs to know how much capital is has.