Author Question: Marginal product crosses the horizontal axis (is equal to zero) at the point where A) average ... (Read 56 times)

pane00 · **on:** Jul 1, 2018

Marginal product crosses the horizontal axis (is equal to zero) at the point where

A) average product is maximized.
B) total product is maximized.
C) diminishing returns set in.
D) output per worker reaches a maximum.
E) All of the above are true.

Question 2

Suppose the federal government allows labor unions to act as the sole seller in labor markets, but the government collects a 1 per hour fee to cover unemployment insurance for each union worker.

Assuming this fee is not so large that it forces the unions to disband, what is the impact of this fee on the equilibrium wage and employment level in the monopolized labor market? A) After-tax wages and employment decline.
B) After-tax wages increase and employment declines.
C) Employment increases and after-tax wages decline.
D) No change in after-tax wages or employment levels.