Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. Mike's opportunity cost of producing one car is ________ pound(s) of cheese.

The MR = MC rule can be restated for a purely competitive seller as P = MC because:

A. each additional unit of output adds exactly its price to total revenue. B. the firm's average revenue curve is downsloping. C. the market demand curve is downsloping. D. the firm's marginal revenue and total revenue curves will coincide.

Using two carefully-labeled diagrams, explain how MPL and APL can be derived from a firm's production function. In your answer, explain the relationship between average and marginal product.

What will be an ideal response?