Christine works for a firm that makes tires for cars. How is Christine's wage affected if the price of tires decreases?
The decrease in the price of tires decreases the demand for workers such as Christine. Her wage decreases as a result.
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An economy produces at point a on the PPF shown in the above figure. A drought reduces the amount of wheat produced and the economy produces at point b. The opportunity cost of a unit of wheat ________
A) remains the same B) increases C) is impossible to calculate without numbers on the axes D) decreases
If a firm experiences constant returns to the variable input in the short run:
A) marginal product will be greater than average variable product, but the two will become more equal as output increases. B) marginal product will be less than average variable product, but the two will become more equal as output increases. C) marginal product will be greater than average variable product, and the difference between the two will become larger as output increases. D) marginal product and average variable product will be equal over the range of output in question.