Legislating input combinations in a particular industry can bias the decision making of the firm's managers and lead to higher-than-necessary costs of production.
Answer the following statement(s) true (T) or false (F)
Answer: True
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Why does an external cost lead to inefficient overproduction?
What will be an ideal response?
The effective rate of protection measures
A) the "true" ad valorem value of a tariff. B) the quota equivalent value of a tariff. C) the efficiency with which the tariff is collected at the customhouse. D) the protection given by the tariff to domestic value added. E) the difference between domestic and foreign prices of the import.
The U.S. economy favors greater government intervention in the market than socialist economy would favor.
Answer the following statement(s) true (T) or false (F)
When the marginal product of labor exceeds the average product of labor
A) the average product of labor is increasing. B) the average product of labor is decreasing. C) the total product curve is negatively sloped. D) the firm is experiencing decreasing returns to scale.