Which of the following statements about a production function is correct for a firm that uses labor to produce output?
a. The production function depicts the relationship between the quantity of labor and the quantity of output.
b. The slope of the production function measures marginal product.
c. The slopes of the production function and the total cost curve are inversely related; if one is increasing, the other is decreasing.
d. All of the above are correct.
d
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The above figure shows the cost curves for a competitive firm. If the firm is to operate in the short run, price must exceed
A) $0. B) $5. C) $10. D) $11.
Iron is required to make steel. Hence, the price elasticity of demand for iron by steel manufacturers will be
A) unit elastic. B) inelastic. C) elastic. D) perfectly elastic.
Refer to the information provided in Figure 29.2 below to answer the question(s) that follow.
Figure 29.2Refer to Figure 29.2. If the economy is currently at Point A and policy makers implement a policy to increase aggregate demand, the time the economy needs to make the adjustment is known as the
A. frictional lag. B. response lag. C. implementation lag. D. recognition lag.
Verizon has a monopoly over local telephone service. If Verizon is producing where marginal revenue is greater than marginal cost, the firm
A. could increase profits by reducing output. B. must be earning zero profit. C. could increase profits by increasing output. D. is maximizing profits.