Returns to specialization can occur when
A) increasing the amount of labor allows workers to specialize.
B) the exponents of the Cobb-Douglas production function are greater than 1.
C) a firm doubles its inputs.
D) the average cost curve is above the marginal costs curve.
A
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The above table shows the short-run production function for Albert's Pretzels. The marginal product of labor equals the average product of labor
A) for all levels of labor. B) at none of the levels of labor. C) only for the first worker. D) only for the fifth worker.
Economic theory predicted that the price of a depletable resource would rise by 10 percent. In reality, the price fell by 5 percent. Which of the following events could explain this discrepancy?
a. Known reserves of the resource were depleted. b. The interest rate rose by 15 percent. c. Antitrust enforcement broke up a cartel among major suppliers of the resource. d. The government imposed an effective price floor.