Say you are the owner of a Pizza place. You know that when you produce 10 pizzas, the average product of each of your workers is 10, and the marginal product of your last worker is 15. From this information you know that
A. the average product is increasing.
B. the average product is decreasing.
C. the marginal product is decreasing.
D. the marginal product is increasing.
Answer: A
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Refer to the scenario above. If the government enforces a ban on Firm B, and asks Firm A to carry out all the production:
A) Firm A's marginal cost is likely to decrease, but its average cost is likely to increase. B) Firm A's marginal cost and average cost are likely to decrease. C) Firm A's marginal cost is likely to increase, but its average cost is likely to decrease. D) Firm A's marginal cost and average cost are likely to increase.
The producer price index measures the prices that firms
A) pay for imported natural resources that go into the production process. B) receive for the goods and services they export. C) pay for labor, whether or not the labor is foreign or domestic. D) receive for the goods and services they use at all stages of production.
The Iranian Revolution in 1979 led to another interruption of oil supplies to the United States. This caused the reoccurrence of
A. deflation. B. full employment. C. trade surpluses. D. stagflation.
According to the author of your textbook, competition is best understood:
A. as price-driven. B. as technology driven. C. within a structural framework. D. as a dynamic process.