Once production has reached the maximum average product of labor, if production increases then
A) average fixed cost rises.
B) total costs decrease.
C) total product decreases.
D) decreasing marginal returns occur.
E) the plant size must be increased.
D
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If a 50 cent increase in price causes the amount purchased to fall by 50 units per week, we know
A) almost nothing about the price elasticity of demand. B) demand is relatively elastic. C) demand is relatively inelastic. D) demand is unit elastic. E) the demand does not obey the law of demand.
The U.S. government's focus on supply reduction efforts in its "war on drugs" has been relatively unsuccessful at addressing illegal drug use
Some economists believe that a successful anti-drug program must concentrate on reducing demand; for example, through drug education and voluntary treatment programs for addicts. a. What will happen to the equilibrium price, quantity, and total revenue from cocaine sales if the government succeeds in its efforts to reduce demand? What is likely to happen to the incentive to sell cocaine? b. Suppose the government continues to concentrate its efforts on supply reduction and is able to reduce the supply of cocaine. As a result of the reduction in supply the price of cocaine increases by 25 percent. If the price elasticity of demand is -0.5, what is likely to happen to the incentive to sell cocaine? c. Based on your answers, explain why one approach might be preferred over the other.
One reason why airlines charge business travelers and leisure travelers different prices is
A) business travelers fly according to schedules that are planned months in advance. Many leisure travelers buy their tickets at the last minute. B) business travelers fly more often than most leisure travelers. As a result, their employers are able to bargain with airlines for lower fares than leisure travelers pay. C) business travelers often have inflexible schedules and have to travel on a particular day. The opposite is true for leisure travelers. D) business travelers usually travel alone. Leisure travelers often fly with friends and family members; therefore, they have a more inelastic demand for airline tickets than business travelers.
Describe China's reform path, including the forces that started China's reform efforts and how they continued through the 1980s and early 1990s
What will be an ideal response?