One baker can bake 15 pies in a day. Two bakers can bake 35 pies in a day. If the marginal revenue product of hiring the second baker is $200, then in a perfectly competitive product market
a. each pie sells for $10.
b. there are diminishing marginal returns.
c. there are decreasing economies of scale.
d. they are operating in a constant cost industry.
e. the marginal cost of production is $200.
A
You might also like to view...
An economy of 82 million people has twenty percent of them engaged in research and development, where their productivity is 0.003
The economy is on a balanced growth path, when suddenly the productiveness of R&D rises to 0.004. For the one period that begins with this productivity increase, the growth rate of output is ________. [Refer to the instruction above.] A) 8.7% B) 9.4% C) 6.6% D) 7%
Dr. Homer Simpson, an economics professor, decided to take a year off from teaching to run a commercial fishing boat in Alaska. That year, Professor Simpson would be officially counted as
A. employed. B. structurally unemployed. C. not in the labor force. D. frictionally unemployed.
Explain: “An effectively regulated natural monopoly will have trouble attracting capital to sustain and modernize its facilities.”
What will be an ideal response?
Refer to the information provided in Figure 6.2 below to answer the question(s) that follow.
Figure 6.2Refer to Figure 6.2. Mr. Lingle?s budget constraint is AC. Point A is
A. an available option and Mr. Lingle does not spend all of his income. B. not in Mr. Lingle's opportunity set but is on his budget constraint. C. an available option and Mr. Lingle exactly spends all of his income. D. not available because it represents a combination of gardenburgers and beer that Mr. Lingle cannot purchase with his current income.