Describe the relationship between marginal productivity and average productivity. Use calculus or a graph to support your answer
What will be an ideal response?
AP = Q(L)/L. dAP/dL = ([L ? MP] - Q) /L2 = (MP - AP)/L. Thus, if MP = AP, AP is constant.
If MP > AP, AP will rise. If MP < AP, AP will fall.
You might also like to view...
A straight-line demand curve with negative slope intersects the horizontal axis at 100 tons per week. At the midpoint on the demand curve (corresponding to 50 tons per week) the price elasticity of demand is
A) 0. B) 0.5. C) 1.0. D) unknown without more information.
In practice, the most difficult aspect of IV estimation is
A) finding instruments that are both relevant and exogenous. B) that you have to use two stages in the estimation process. C) calculating the J-statistic. D) finding instruments that are exogenous. Relevant instruments are easy to find.
Which of the following demonstrates the income effect of a price change?
a. Sales of smartwatches rise during tax season when many consumers have tax refunds to spend. b. A store manager notes that most customers who buy a smartwatch do not purchase a second smartwatch, no matter how low the price is. c. Sales of smartwatches rise after the company introduces a new model with high utility for consumers. d. A store manager notes that when the price of the smartwatch rises, fewer consumers are interested in owning two of them.
Among the reasons that the poor countries have been unable to close the "technology gap" with the rich countries is
A) poorly established property rights. B) poorly developed financial markets. C) low education levels. D) all of the above E) none of the above