"The Big Tradeoff" refers to the effect of redistribution on efficiency

The table above shows the total product schedule for The X Firm. Decreasing marginal returns occur with the ________ worker because ________

A) 5th; the marginal product of labor for the 5th worker is less than the marginal product of the 4th worker B) 5th; the average product of labor is also declining C) 4th; output reaches is maximum D) 6th; output starts to decline E) 6th; the marginal product of labor is greater than the average product of labor

Which of the following describes the substitution effect of a price change?

A) The change in quantity demanded of a good that results from the change in the price of a substitute for the good. B) The change in demand that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power. C) The change in quantity demanded of a good that results from the effect of a change in price on consumer purchasing power, holding everything else constant. D) The change in quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.