How do the marginal and average products of labor affect a firm's marginal and average variable costs in the short run?
What will be an ideal response?
Over the range of output for which the marginal product is increasing, marginal cost is decreasing and vice versa. At the level of output at which the marginal product is at its maximum, marginal cost will be at its minimum. And, over the range of output for which the average product is increasing, average variable cost is decreasing and vice versa. Finally, the level of output at which the average product is at its maximum is the same level at which average variable cost is at its minimum.
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Part of the surplus lost to market participants when a tax is imposed is:
A. transferred to others who are affected. B. transferred to the government in revenues. C. redistributed from seller to buyer. D. redistributed from buyer to seller.
Which of the following is a characteristic of a contestable market?
a. long-run economic profit b. many firms that are small relative to the market c. high costs for entry and exit d. minimum-cost production methods
Matteo prepares dinner for his family on Tuesdays and Fridays. Which of the following categories excluded from the GDP does this example belong to?
a. underground economy b. nonmarket transactions c. leisure d. externalities
Occupational licensing has much the same effect as:
A. inclusive unionism. B. exclusive unionism. C. bilateral monopoly. D. monopsony.