The Value of Total Output Decreases When Labor Leaves One

question 58

Multiple Choice

The value of total output decreases when labor leaves one industry and goes to another and capital leaves the second industry and goes to the first. This indicates that

• A) the first situation was not efficient.
• B) the second situation is efficient.
• C) price is greater than marginal cost.
• D) it would be efficient to return to the first situation.

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Definitions:

Controls Small Share

The act of managing or influencing a minor portion of the market or resources.

One Seller

Indicates a market structure known as a monopoly, where a single company or entity controls the entire supply of a product or service, facing no competition.

Few Substitutes

Describes a market condition where there are limited alternative products or services, often leading to higher prices and less competition.

Barriers To Entry

Factors that prevent or restrict new competitors from easily entering an industry or area of business.