In assessing the efficiency of government policy, economic analysis would focus on:
A. The size of government: big versus small
B. Marginal benefits versus costs of government policy and action
C. Presence or absence of the "invisible hand"
D. Revenues and profitability of the government agencies
B. Marginal benefits versus costs of government policy and action
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An increase in labor hours will lead to
A) a shift of the aggregate production function but no movement along it. B) a movement along the aggregate production function but no shift in it. C) both a movement along and a shift in the aggregate production function. D) neither a movement along nor a shift in the aggregate production function.
Which one of the following is the best description of a monopolist?
a. a firm that produces a single product b. a firm that is the sole producer of a narrowly defined product class, such as yellow, grade-A butter produced in Wisconsin c. a firm that is the sole producer of a product for which there are no good substitutes in a market with high barriers to entry d. a firm that is large relative to its competitors
Suppose you manage a firm with two production plants. The marginal product of labor at plant 1 is MP1 = 1400 - L1 where L1 is the number of workers employed in plant 1. The marginal product of labor at plant 2 is MP2 = 2000 - L2 where L2 is the number of workers employed in plant 2. Given that you have 1,000 workers, what is the best allocation of workers between the two plants?
What will be an ideal response?
Which of the following statements is FALSE?
A) An unregulated, profit-maximizing monopolist will not operate in the inelastic portion of the demand curve. B) The marginal revenue earned by a monopolist will always be less than the product's price. C) Typically there are numerous very close substitutes for the product of a monopolist. D) For a profit-maximizing monopolist, marginal revenue equals marginal cost.