secure property rights promote economic progress because they
What will be an ideal response?
encourage individuals to produce efficiently and undertake productive investments
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What is the average total cost of hiring the 7th worker?
a. $400 b. $800 c. $1200 d. $1600
A firm is using 500 units of capital and 200 units of labor to produce 10,000 units of output. Capital costs $100 per unit and labor $20 per unit. The last unit of capital added 50 units of output, while the last unit of labor added 20 units of output. The firm
A. is using the cost-minimizing combination of capital and labor. B. should use more of both inputs in equal proportions. C. could produce the same output at a lower cost by using less capital and more labor. D. could produce the same level of output at a lower cost by using more capital and less labor. E. should use less of both inputs in equal proportions.
One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired. B. prices tend to adjust more quickly downward than upward. C. wages are sticky downward. D. input prices increase with output prices.
Assume a perfectly competitive constant-cost industry is initially at long-run equilibrium. Now suppose that a decrease in market demand occurs. After all the long-run adjustments have been completed, the new equilibrium price
A. will be the same as the initial price, and the output will be less. B. will be less than the initial price, but the new output will be greater. C. will be greater than the initial price, but the new output will be less. D. and industry output will be less than the initial price and output.