A firm has no fixed factors of production in
A. the short run.
B. the long run.
C. the short run and in the long run.
D. neither the short run nor the long run.
Answer: B
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If Country A’s opportunity cost of corn is lower than Country B’s opportunity cost of corn, then
a. Country A has a comparative advantage in the production of corn. b. Country A has an absolute advantage in the production of corn. c. Country A should import corn from Country B. d. Country B should produce just enough corn to satisfy its own residents’ demands.
According to efficiency wage theory, a firm that raises wages by one percent will actually lower the labor cost per unit of output if the wage increase
A) raises output per worker by more than one percent. B) raises output per worker by less than one percent. C) does not change output per worker. D) lowers output per worker by less than one percent.