Suppose that a competitive firm hires labor up to the point at which the value of the marginal product equals the wage and that labor is the only input that varies for the firm. If the firm pays a wage of $700 per week and the marginal product of labor equals 35 units per week, then the marginal cost of producing an additional unit of output is
a. $20.
b. $35.
c. $700.
d. We do not have enough information to answer this question.
a
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Prime Pharmaceuticals has developed a new asthma medicine, for which is has a patent. An inhaler can be produced at a constant marginal cost of $2/inhaler
The demand curve, marginal revenue curve, and marginal cost curve for this new asthma inhaler are in the figure above. With its patent giving it a monopoly for its new inhaler, if Prime Pharmaceuticals operates as a single-price monopoly, then consumer surplus is ________ and producer surplus is ________. A) zero; $64 million B) $32 million; $32 million C) $16 million; $32 million D) $16 million; $48 million.
A situation in which output decreases while prices increase is often referred to as:
A. inflation. B. negative economic growth. C. a recession. D. stagflation.
If the price elasticity of demand for good A is -2, then a 1% increase in
A) consumer income will result in a 2% decrease in the demand for good A. B) consumer income will result in a 2% increase in the demand for good A. C) the market price of good A will result in a 2% increase in the quantity demanded of good A. D) the market price of good A will result in a 2% decrease in the quantity demanded of good A.
Refer to A Negative Externality Problem. The equation for social marginal cost is
Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation. a. MCS = 10 + Q b. MCS = Q c. MCS = 20 + Q d. MCS = 10 + 10Q