One seamstress can sew 2 dresses per day and two seamstresses can sew 5 dresses per day. If the marginal revenue product of hiring the second seamstress is $360, then in a competitive product market
a. there are decreasing returns to scale
b. there are diminishing returns to labor
c. each dress sells for $120
d. the seamstresses are earning zero economic profits in the short run
e. marginal cost of production is $120
C
You might also like to view...
A perfectly competitive firm's short-run shutdown point is the level of output at which
A) price equals average total cost. B) price equals average fixed cost. C) price equals the minimum average variable cost. D) price is above the minimum average total cost but below the minimum average fixed cost.
Suppose everyone in a town prefers spending on improved public transportation systems instead of public parks, and prefers spending on public parks instead of building a public zoo. An ideal voting system would ensure that:
A. public parks could beat transportation spending. B. zoo funding could beat public parks. C. zoo funding could beat public transportation. D. public transportation spending could beat zoo funding.
Which of the following situations will arise in the domestic market following the imposition of an import ban?
A. imports increase, domestic production increases, prices increase B. imports increase, domestic production decreases, prices decrease C. imports decrease, domestic production increases, prices increase D. imports decrease, domestic production increases, prices decrease
The price of a bond with no expiration date is originally $1,000 and has a fixed annual interest payment of $150. If the price of the bond then falls by $100, what will be the interest rate yield to a new buyer of the bond?
A. 17.8 percent B. 16.7 percent C. 15 percent D. 11.2 percent