If a firm is operating on the production function, then workers:
A. are usually putting forth minimal effort.
B. may not be putting forth maximal effort.
C. are usually putting forth average effort.
D. must be putting forth maximal effort.
Answer: D
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Refer to the table above. When does diminishing marginal returns to capital set in?
A) When the second machine is used B) When the third machine is used C) When the fourth machine is used D) When the fifth machine is used
Which of the following utility functions has the same MRS as U(q1,q2 ) = q1 q2?
A) q11/2 q21/2 B) q1 + q2 C) q11/2 + q21/2 D) (q11/2 + q11/2 )2
If the quantity you buy of a good increases when your income increases, the good is clearly a(n)
a. essential good b. inferior good c. substitute good d. complementary good e. normal good
The situation in which actual output exceeds potential output
a. is impossible because all resources are employed to produce potential output b. is possible only in times of high unemployment c. is possible only if the unemployment rate is negative d. is possible only in the long run e. creates pressure for inflation