A Company Uses 100 Workers and 30 Units of Capital

question 183

Multiple Choice

A company uses 100 workers and 30 units of capital to produce 500 units of output. If this company increases its capital to 50 units and, as a result, its output increases by 300 units, the productivity of labor ________ to ________ units per worker.

• A) increases; 8
• B) increases; 1
• C) increases; 3
• D) decreases; 4

Explore the implications of property rights, legal frameworks (injunctions, liability rules), and collective bargaining on addressing externalities.

Distinguish between public and private solutions to externalities and the conditions under which they are effective.

Analyze the implications of externalities on market failure and the role of government in correcting these failures.

Understand the concept of marginal social cost and marginal social benefit in the context of pollution and externalities.

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