Describe the relationship between marginal productivity and average productivity. Use calculus or a graph to support your answer
What will be an ideal response?
AP = Q(L)/L. dAP/dL = ([L ? MP] - Q) /L2 = (MP - AP)/L. Thus, if MP = AP, AP is constant. If MP > AP, AP will rise. If MP < AP, AP will fall.
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Total revenues
A) are defined as the quantity sold divided by price. B) are not the same as total receipts from the sale of output. C) equal gross revenues minus all expenses of the firm. D) equal the price per unit times the total quantity sold.
The Employment Act of 1946: a. guaranteed full employment
b. allowed the federal government to hire as many people as it could to achieve full employment. c. gave the federal government the power to levy an income tax. d. imposed a responsibility on the federal government to promote maximum employment. e. obligated the federal government to run budget surpluses to achieve full employment.
As the multiplier process works through time, the size of the multiplier effect becomes
a. larger. b. smaller. c. constant. d. explosive.
In 2003, Congress passed a substantial cut in income taxes. The Federal Reserve also lowered interest rates. How can these two actions be categorized?
A) Both actions can be categorized as fiscal policy. B) Both actions can be categorized as monetary policy. C) The tax cut can be categorized as monetary policy and the lowering of interest rates can be categorized as fiscal policy. D) The tax cut can be categorized as fiscal policy and the lowering of interest rates can be categorized as monetary policy.