How does a better technology affect a producer who uses this technology?
a. It keeps production costs steady.
b. It reduces production costs.
c. It lessens the seller’s willingness to supply the good.
d. It lowers expectations about the good.
b. It reduces production costs.
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Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The table below describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.Employee-HoursPer DayOutputPer Day0014048091201516023200When the firm uses 9 employee-hours, its total labor cost each day is:
A. $30 B. $126 C. $56 D. $84
When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. The price elasticity of demand for this product is
A. -67. B. -0.67. C. -0.15. D. -1.5.
Which of the following best represents the effects of a decrease in the price of tomato juice, other things being equal?
A. An upward movement along the demand curve for tomato juice. B. A downward movement along the demand curve for tomato juice. C. A rightward shift in the demand curve for tomato juice. D. A leftward shift in the demand curve for tomato juice.
Assume labor is the only variable input and that an additional input of labor increases total output from 72 to 78 units. If the product sells for $6 per unit in a purely competitive market, the MRP of this additional worker is:
A. $6. B. $12. C. $36. D. $72.