Suppose firms A and B each make T-shirts. Firm A's production function is q = L0.5 K0.5. Firm B's production function is q = 1.2 ? L0.5 K0.5
If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.
Firm B's APL and MPL will equal 1.2 times the APL and MPL of firm A.
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________ flexible wages and prices imply that the short-run aggregate supply curve is ________
A) More; flatter B) Less; steeper C) less; vertical D) More; steeper
The region with the highest percentage of people who live on less than $1.90 a day is:
A. sub-Saharan Africa. B. South Asia. C. China. D. None of these is true.
Which of the following is a long-run impact of an increase in the wage?
A. The quantity demanded of labor increases because there are no diminishing returns. B. The quantity demanded of labor increases because the marginal revenue product curve shifts upward due to a higher product price. C. The quantity demanded of labor decreases because firms face a higher degree of diminishing returns. D. The quantity demanded of labor decreases because firms will have an incentive to use more of other inputs instead of labor.
Being a price taker essentially means
A. the firm cannot legally set its price below the market price. B. the firm cannot legally set its price above the market price. C. a firm can influence the market price. D. a firm cannot influence the market price.