Assume that a firm employs positive quantities of both capital and labor. True or false: If the marginal productivity per dollar spent on capital exceeds the marginal productivity per dollar spent on labor, then the firm should either use more capital, less labor, or some combination thereof. "A competitive firm with a constant returns to scale production function will produce either an unlimited amount of output, no output, or an indeterminate amount of output." Explain. Consider a competitive, constant-cost industry in long-run equilibrium. Policymakers unexpectedly impose a per-unit tax on the output produced by the firms in this industry. Depict the effect of the tax on the representative firm's cost curves. What will the effects of the tax be in the short run on industry output and price? Will the price increase by the full amount of the tax in the short run? What about in the long run? How would your answers to these questions change if the industry was characterized by increasing-cost instead