HW11-7 - 7.

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7. The law of diminishing returns implies that, with the use of capital fixed, as the use  of labor rises,     A.  total product will fall eventually.   B.  the marginal product of labor will fall eventually.   C.  the total product of labor will fall below the marginal product of labor.   D.  the production process will become technologically inefficient eventually.        8. In perfect competition,     A.  each firm can influence the price of the good.   B.  there are few buyers.   C.  there are significant restrictions on entry.   D.  all firms in the market sell their product at the same price.        9. A perfectly competitive firm's economic profit is maximized by producing the  amount of output such that     A.  total revenue equals total variable cost.   B.  marginal revenue equals marginal cost.   C.  total revenue equals total cost and marginal cost.   D.  marginal revenue is equal to total revenue.        10. A perfectly competitive firm's short-run shutdown point is the level of output at  which     A.  price equals average total cost   B.  price equals average fixed cost.   C.  price equals the minimum average variable cost.   D.  price is above the minimum average total cost but below the minimum average  fixed cost.        11. For any perfectly competitive firm, marginal revenue is     A.  always greater than marginal cost.   B.  equal to price.   C.  always less than marginal cost.  
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This note was uploaded on 01/05/2012 for the course 101 melissa jo taught by Professor Acc101 during the Spring '11 term at Aarhus Universitet.

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HW11-7 - 7.

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