Why is the relationship between marginal product and marginal cost an inverse one?
What will be an ideal response?
ANS:
Inputs may cost a given amount. The cost of an input is spread over the amount of the marginal product. Therefore, when marginal product is rising, the marginal cost decreases. And when marginal product is falling, the marginal cost increases.
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The average investor must weigh the benefits of liquidity against
A) the high taxes generally levied on liquid assets. B) the lower returns on liquid assets. C) the high transactions costs involved in disposing of liquid assets. D) the greater variability in the nominal returns on liquid assets.
The long-run supply curve of a perfectly competitive industry is horizontal
a. in an increasing-cost industry b. in a decreasing-cost industry c. if the short-run supply curves for firms are upward-sloping d. if the short-run market supply curve is negatively sloped e. in a constant-cost industry
The government can break up monopolies under federal antitrust legislation.
Answer the following statement true (T) or false (F)
If a certain automotive part can be purchased in Mexico for 32 pesos or in the United States for $5.25, and if the nominal exchange rate is 8 pesos per U.S. dollar, then the automotive part:
A. is less expensive in the United States. B. costs the same in Mexico and the United States. C. is more expensive in the United States. D. is more expensive in Mexico.