Question

which statement is correcs? 6 The total product of a firn is as follows Total Produa A) Mn is increasing in phase L C) APh is increasing in phase III. B) MPh is increasing in phase II D) MP, is maximized in the edge of phase II and I11. a particular production process that capital and labor are perfect l. If the 7. Suppose in substitutes so that three units of labor are equivalent to one unit of capita price of capital is s4 per unit and the price of labor is si per unit, the firm shou A) employ capital only B) employ labor only C) use three times as much capital as labor D) use three times as much labor as capital 8. Diseconomies of scale exist when A) the firm's total cost falls as the level of output increases. B) the firm's total cost increases as the level of output increases. C) the firm's average cost decreases as the level of output decreases. D) the firm's everage cost decreases as the level of output increases. 9. If STC 300+4q+4q2 and SMC 4+ 8q where q is output and all fixed costs are sunk, the firm's short-run supply curve is A) q-4+8p for p24 and zero otherwise. B) q 4+4p for p24 and zero otherwise. C) q-o ifpez and q-1/4p-1 if pa2 D) q-o if pc4 and q-1/8p-1/z if pz4 1o. Identify the truthfulness of the following statements. L. A monopoly market consists of a single seller facing many buyers. Il. Because the monopolist is the only seller of her product, she may sell any quantity that she chooses for any given price. A) Both I and II are true. C) I is true; Il is false. B) Both l and II are false. D) I is false; II is true.

Answer 1

6. option A - MPL is increasing in phase I

7. option B - employ labour only (cheaper to employ labour)

8. option C - the firm's average cost decreases as the level of output decreases.

9. SR supply curve is same as the MC curve above shutdown point:

p = 4 + 8q

q = p/8 - 1/2 if p >=4

10. only statement I is true.