Initially, when workers are added, marginal product rises and marginal cost falls. Why is this the case?
a. Total product increases by a fixed amount with each additional employee.
b. The equipment is new, and no repair or maintenance costs have set in yet.
c. Marginal costs are fixed costs that are spread over a larger number of employees.
d. Each additional worker is adding more to the total output than the previous worker.
d. Each additional worker is adding more to the total output than the previous worker.
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Suppose India and France have the same PPF, shown in the figure above. Based on their current production points, which is India's most likely future PPF?
A) PPF1 B) PPF2 C) PPF0 D) either PPF0 or PPF1 E) None of the above because economic growth will not happen in India.
An open market purchase of bonds by the Fed
a. drains reserves from the banking system and decreases the money supply b. injects reserves into the banking system and increases money demand c. injects reserves into the banking system and increases the money supply d. drains reserves from the banking system and increases the money supply e. injects reserves into the banking system and decreases the money supply
A decrease in the price level will reduce business confidence and cause a decrease in equilibrium GDP
a. True b. False
If a firm that emits a form of pollution is also a monopolist, is the firm more likely to be allocatively efficient when compared to a nonmonopoly polluter? Explain.
What will be an ideal response?