Mondo's Microbrewery is growing rapidly. As a result of achieving larger size, the firm realizes it needs to hire quite a few additional employees and upgrade its brewing and bottling equipment, which increases its average costs. The best explanation for these events is that Mondo's Microbrewery is experiencing ________ returns to scale.
A. constant
B. decreasing
C. increasing
D. first decreasing and then increasing
Answer: B
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The additional revenue a firm obtains from hiring one more unit of input is called the marginal revenue product
a. True b. False Indicate whether the statement is true or false
Employment discrimination is a source of
a. economic inefficiency. b. increased economic growth. c. innovation. d. shifting production possibilities. e. All of the above are correct.
What happens as a variable input increases while other inputs are fixed?
a. Eventually the fixed inputs will increase at a rate equal to or below the variable increases. b. Fixed costs will rise and variable costs will fall as they are spread over larger output. c. The average variable cost will remain equivalent to or below the average fixed cost. d. At some point the increase will lose its effectiveness, and additions to output will decline.
The primary purpose of labor unions is to
A. strike. B. give individuals greater bargaining power with employers. C. change our economic system. D. provide workers with political power.