How do the marginal and average products of labor affect a firm's marginal and average variable costs in the short run?
What will be an ideal response?
Over the range of output for which the marginal product is increasing, marginal cost is decreasing and vice versa. At the level of output at which the marginal product is at its maximum, marginal cost will be at its minimum. And, over the range of output for which the average product is increasing, average variable cost is decreasing and vice versa. Finally, the level of output at which the average product is at its maximum is the same level at which average variable cost is at its minimum.
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The ability of factors to migrate abroad
A) reduces the severity of unemployment and the fall in the rate of return available to investors. B) increases the severity of unemployment and the fall in the rate of return available to investors. C) reduces the severity of unemployment but increases the fall in the rate of return available to investors. D) cannot change the severity of unemployment and the constant rate of return available to investors. E) reduces the migration of highly-skilled workers.
The impact lag facing the Fed is
A) the delay before open market operations are able to affect the monetary base. B) the delay before the Fed's announcement of a new policy has an impact on the decisions of the public. C) the time required for monetary policy changes to affect output, employment, and prices. D) the delay before the impact of a recession on output and prices becomes clear to the Fed.