Unformatted text preview: equilibrium approach, analyze the effect of more women entering the labor market on the market price of legal services. (HINT: The output is legal services. One input to legal services is labor. To do this analysis, you will need 3 graphs, one for the input market and two for the output market - one for the market for legal services and one for the typical law firm.) 3) True, False or Uncertain. For each of the following, decide if the statement is true, false or uncertain and explain why. Your analysis determines your grade. a. The market outcome in a perfectly competitive economy leads to an efficient mix of output. b. Diminishing marginal returns explains why the marginal revenue product of labor eventually declines. c. Giving food stamps to poor families will lead to a more efficient distribution of outputs than giving cash assistance. d. A firm will continue investing up to the point where the marginal revenue product of capital is equal to the total investment....
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- Fall '10
- Economics, marginal revenue product, legal services