Author Question: At a given level of labor employment, knowing the difference between the average product of labor ... (Read 43 times)

Mollykgkg · **on:** Jul 1, 2018

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.

Question 2

If one of the agents in an Edgeworth Box has monopoly power and maximizes profit as the sole seller, then the economic outcome is:

A) inefficient because the monopoly has no incentive to be technically efficient.
B) inefficient because the monopoly produces less than the optimal amount of output.
C) Both A and B are correct.
D) none of the above