One seamstress can sew 2 dresses per day and two seamstresses can sew 5 dresses per day. If the marginal revenue product of hiring the second seamstress is $360, then in a competitive product market
a. there are decreasing returns to scale
b. there are diminishing returns to labor
c. each dress sells for $120
d. the seamstresses are earning zero economic profits in the short run
e. marginal cost of production is $120
C
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One major assumption of economics is that people
A) act as if they systematically pursue self-interest. B) behave randomly without any predictable pattern. C) are sometimes rational and sometimes irrational. D) always pursue the interests of others.
What has been the impact of the widespread adoption of automated teller machines (ATMs) on the demand for bank tellers?
A) The demand for tellers has increased. B) The demand for bank tellers has become more inelastic. C) The demand for bank tellers has become more elastic. D) There has been no change because the ATMs and the employees provide completely different services.