The knowledge and skill that make for a productive worker are referred to by economists as:

At a given level of labor employment, knowing the difference between the average product of labor and the marginal product of labor tells you

A) whether increasing labor use raises output. B) whether increasing labor use changes the marginal product of labor. C) whether economies of scale exist. D) whether the law of diminishing returns applies. E) how increasing labor use alters the average product of labor.

Which of the following is designated by points C’ and C in Exhibit 4?

a. Calvin and Wendy each benefit by specializing and trading their goods.
b. By specializing in food, Wendy can produce and trade 13 pounds of food per day.
c. In their exchange, the price of Wendy’s food is higher than the price of Calvin’s cloth.
d. Through trade, Wendy’s food production drops from 10 pounds to 7 pounds per day.