Explain why labor might not always be a variable input
What will be an ideal response?
In the real world, units of labor are not identical. Many firms employ highly specialized units of labor. Their supply might be very inelastic so that the firm cannot easily increase the amount of this type of labor.
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Which of the following is likely to occur when it is known that a two-person game is to be played only once?
a. Collusion b. The demand curve becomes perfectly inelastic for this time period c. The prisoner's dilemma d. The pursuit of profit maximization for the entire industry e. An attempt to equate marginal revenue with marginal cost
The worst and most difficult to extract resources are used first.
Answer the following statement true (T) or false (F)
Payments to individuals for which no current goods or services are exchanged are known as
A. AD shortfalls. B. AD excesses. C. Income transfers. D. Social Security payroll taxes.
The most efficient combination of resources in producing a given output is the combination that:
A. comes closest to using the same quantities of land, labor, capital, and entrepreneurial ability. B. minimize the cost per unit of output. C. uses the smallest total quantity of all resources. D. conserves most on the use of labor.