Question
1.What is GDP? What makes it vary? What factors make that component more variable than other components of GDP. 2.Define all the following: A.AVC B.MR
1.What is GDP? What makes it vary? What factors make that component more variable than other components of GDP.
2.Define all the following:
A.AVC
B.MR
C.GDP
D.Trough
E.Recession
3.Explain why an individual firm in perfect competition is known as a price taker.
4.1.Draw a perfectly competitive firm's AVC, AFC, ATC, MC, MR, AR and show what the supply curve will be in this firm on a diagram and properly label.
5.1.Suppose the labour union negotiates a doubling of wage per hour worked. In a short paragraph indicate what will happen in terms of economic efficiency?
6.1.Explain under what circumstances a firm in perfect competition might continue to produce when MC is less than ATC. At what point will the firm decide to shut down?
Explain why it continues to produce even when making a loss?
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