Suppose a firm finds that an additional dollar spent on labor increases output more than does an additional dollar spent on machines. Under these conditions, the firm:
A. should substitute labor for machines if it wants to increase economic efficiency.
B. is technically efficient.
C. should substitute machines for labor if it wants to increase economic efficiency.
D. is economically efficient.
Answer: A
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Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
A private good is ________ and ________
A) rival; excludable B) nonrival; excludable C) rival; nonexcludable D) nonrival; nonexcludable
Assume that you have data on a firm's average fixed cost and average variable cost for various levels of output and you are asked to calculate the total variable cost and total cost of the firm
Would this be enough information to perform this calculation? Explain
Other things the same, higher population growth
a. raises the amount of physical capital per worker and there is some evidence that it raises the pace of technological progress. b. raises the amount of physical capital per worker, but there is some evidence that it reduces the pace of technological progress. c. reduces the amount of physical capital per worker, but there is some evidence that it raises the pace of technological progress. d. reduces the amount of physical capital per worker and there is some evidence that it reduces the pace of technological progress.