The firm's production function is the relationship between the ________ and ________.
A) output produced; the quantities of all inputs
B) maximum output attainable; the quantity of variable inputs
C) possible range of maximum output; the quantity of variable inputs
D) maximum output attainable; the quantities of both labor and capital
Ques. 2The above figure shows the market for labor. The employer is a monopsony. At the equilibrium level of employment, which of the following is CORRECT?
A) MCL = VMP
B) VMP > W
C) W < MCL
D) All of the above are correct.
Ques. 3During the mid-2000s, the average price of a used car fell by nearly 500 and the quantity sold nation-wide decreased by several thousands each year. This set of results is a contradiction of the law of demand.
Indicate whether the statement is true or false
Ques. 4If the quantity demanded of a good decreases by 10 percent when the price of the good increases by 5 percent, the elasticity of demand is -2.00.
Indicate whether the statement is true or false
Ques. 5The demand for a product produced in a perfectly competitive market permanently increases. In the short run, the price
A) rises and each firm produces less output.
B) rises and each firm produces more output.
C) does not change as new firms enter the industry.
D) does not change because each firm produces more output.
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