Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500. Suppose that installation of a new assembly line increases the output produced per worker. The cost per unit of output
A. will increase.
B. will be unchanged.
C. will decrease.
D. is at its maximum.
E. is at its minimum
Answer: C
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Based on the data in the table, this Application addresses the economic concept of
A) the real-nominal principle. B) the principle of diminishing returns. C) the principle of voluntary exchange. D) the marginal principle.
If both the supply and demand curves shift to the left, then we can conclude that there will be
A. an increase in the equilibrium quantity sold. B. a decrease in the equilibrium quantity sold. C. an increase in the equilibrium price. D. a decrease in the equilibrium price.
If the expected return on bonds increases, all else equal, the demand for bonds increases, the price of bonds ________, and the interest rate ________
A) increases; decreases B) increases; increases C) decreases; decreases D) decreases; increases
"According to Keynes, the economy is essentially a self-regulating system." Do you agree or disagree? Why?
What will be an ideal response?