A perfectly competitive firm's demand curve for labor is not
a. a horizontal line at the market wage rate
b. its marginal revenue product curve of labor
c. the willingness of the firm to buy various quantities of labor at different wage rates
d. unrelated to the supply curve of labor facing the firm
e. the marginal physical product curve of labor multiplied by the price of the good
A
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Suppose that you are given a cost function c(w,r,x)=2w1/2r1/2x3/2 where w is the wage rate for labor, r is the rental rate of capital and x is the output level. a. Does the production process that gives rise to this cost function have increasing, decreasing or constant returns to scale? b. Derive the marginal cost function. c. Calculate the supply function for the firm - i.e. the function that tells us for every combination of input and output prices, how much the firm will optimally produce. How does output by the firm change as input and output prices change? d. If the cost function had been c(w,r,x)=2w1/2r1/2x1/2 instead, how would your answer to (c) change? How can that make any sense?
What will be an ideal response?
Control of water pollution from pesticide runoff in the United States is the responsibility of
a. the U.S. Department of Agriculture b. the Environmental Protection Agency c. state attorneys general d. state departments of agriculture e. state environmental protection agencies
If a person chooses self-sufficiency, then she can only consume what she produces
a. True b. False Indicate whether the statement is true or false
Deflation generally occurs when which of the following occurs?
A) the consumer price index is greater than the GDP deflator B) the consumer price index decreases C) the rate of inflation falls, for example, from 4% to 2% D) nominal GDP does not change