The short-run average total cost, average variable cost, and marginal cost curves are all U-shaped because of
i. constant total fixed cost.
ii. increasing and then decreasing marginal returns as more labor is hired.
iii. economies and diseconomies of scale as the plant size increases.
A) only i
B) only ii
C) i and iii
D) ii and iii
E) i, ii, and iii
B
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The Solow model implies that continuous growth in productivity at a rate of one percent will result in continuous growth of output per worker at a rate of 1.43%
Thus, if at a point in time output per worker is 270 and productivity rises by one percent, the resulting level of output per worker is ________. A) 386 B) 273 C) 274 D) 277
A firm should continue producing until
A) the cost of producing the output equals the revenues obtainable from selling the output. B) the cost of increasing output by one more unit equals the revenues obtainable from selling the extra unit. C) average costs are at a minimum. D) the average cost when another unit is produced equals the average revenue obtainable from selling the extra unit.