The payoffs resulting from new investment
A) occur in the present and are known with certainty.
B) occur in the future but are not known with certainty.
C) depend only on current profits.
D) occur in the future and are known with certainty.
B
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Answer the following statements true (T) or false (F)
1. In perfect competition, if the market price is at the same level as the minimum point of the firm’s average total cost curve, the best the firm can hope for is to break even. 2. If new firms enter a perfectly competitive industry, the market price of the finished product will rise. 3. An increase in market demand for a product can raise the MR for a firm in perfect competition. 4. Under perfect competition in the short run, profits among firms can differ if some firms use their resources more efficiently. 5. Since all producers have the same average revenue under conditions of perfect competition, they all have the same profits in the short run.
According to efficiency wage theory, a firm that raises wages by one percent will actually lower the labor cost per unit of output if the wage increase
A) raises output per worker by more than one percent. B) raises output per worker by less than one percent. C) does not change output per worker. D) lowers output per worker by less than one percent.
Specialization of labor means that: a. production requires a special kind of labor
b. the overall skill level of labor is increasing. c. individuals produce goods other than those they want to consume. d. individuals achieve self-sufficiency in production. e. exchange within an economy consists of trading in services.
Other things being equal, when average productivity falls:
A. average fixed cost must rise. B. marginal cost must rise. C. average variable cost must rise. D. average total cost must rise.