Author Question: Refer to the scenario above. Instead of the price increase, if there is a fall in price from 6 to 4, ... (Read 68 times)

APUS57 · **on:** Jun 29, 2018

Refer to the scenario above. Instead of the price increase, if there is a fall in price from 6 to 4, the absolute value of Gary's arc elasticity of demand for shirts is:

A) 1.2.
B) 2.14.
C) 4.
D) 5.

Question 2

Suppose a firm sells its product in a competitive market. If the ongoing wage rate in a competitive labor market is 30 and the market price of a firm's product is 2, then which of the following statements is true?

A) The firm should continue to hire workers until the marginal product of the last worker hired is 2 units.
B) The firm should continue to hire workers until the marginal product of the last worker hired is 5 units.
C) The firm should continue to hire workers until the marginal product of the last worker hired is 10 units.
D) The firm should continue to hire workers until the marginal product of the last worker hired is 15 units.