How is the average product of labor calculated?
What will be an ideal response?
Ques. 2Refer to Table 8.3 . Assume the price of labor is 5.00 and the price of capital is 10.00 and the firm's fixed costs are 15 .
What production technique will be used to produce the first unit of output? The second? The third? What are the firm's total variable costs, total costs, and marginal costs of producing one unit of output? Two units of output? Three units of output?
Ques. 3If ration coupons are used to determine who gets the products available, what happens if the government allows individuals to trade them?
What will be an ideal response?
Ques. 4A monopolist, unlike a perfect competitor, has total control in its market because it is the single producer. Why, then, must a single-price monopolist decrease its price if it wants to increase its output?
What will be an ideal response?
Ques. 5If a firm shuts down in the short run, will it have zero costs or not? Explain.
What will be an ideal response?
Ques. 6Mandating clean technology, cap-and-trade, and taxes are tools that government can use to limit pollution.
Indicate whether the statement is true or false
Ques. 7What is a natural monopoly?
What will be an ideal response?
Ques. 8What are ration coupons and what is their purpose? Provide a historical or current example.
What will be an ideal response?
Ques. 9The Coase Theorem states that externalities can always be eliminated by the market as long as property rights exist, the number of parties involved is small, and transactions costs are low.
Indicate whether the statement is true or false
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