The change in total cost, ΔTC in this case is equal to w and the change in total output produced, ΔQ is equal to the marginal product of the last unit of labor, MPL. Substituting w and MPL in the marginal cost formula above gives:

MC= w/MPL

Collusion is an agreement among the firms of a market about the prices to charge or output supplied.

In the most general sense, there are two types of markets: product markets and factor markets. Production markets are where all sorts of goods and are bought and sold. In stock markets such as the Turkey’s BIST (Borsa İstanbul), shares of companies are bought and sold.  If you want to buy a piece of land or house, then you are a participant in the land market or real estate market. When you are offered a consumer loan, you are in a capital market. If you try to get a job, you are in a labor market. The true answer is A.

Total Revenue

Total Revenue The total revenue of a firm is the price times the quantity sold by the firm.

Total Revenue (TR) = Price (P) x Quantity (Q)

How does total revenue change in response to changes in price and quantity? Well, that depends on the type of market structure in which the firm operates and the price elasticity of demand.

The marginal product is computed as the change in the total product divided by the change in labor input. For L=2 the TP = 2*2 + 4 = 8 and for L=3 the TP = 2*3  + 4 = 1. The marginal product is equal to (10 - 8)/(3 - 2) = 2. The answer is A.

A demand curve or a demand schedule for a good or service is a plot on the quantity-price (QP) plane. A demand schedule is a table showing how much of a given product an individual or a household would be willing to buy at different prices. Demand curves are usually derived from the given information of demand schedules. On a demand schedule, there is information about the price and quantities demanded at each different price. The quantity demanded is the amount of a good that an individual or a household would buy in a given time period at the current market price.

It maps alternative price levels to different quantities that an individual or a group of individuals are willing and able to buy at each of those price levels, when income level and other factors affecting demand are held constant. In other words, a demand curve shows how much more of a product an individual is willing to buy when its price falls in the absence of a change in that individual’s income, tastes, etc. As it is understood from the information given the price of the good isn’t held constant, so the correct answer is “D”.

Inflation is the increase in the general price level (or overall level of prices) in the economy within a given period of time. Therefore, the high and persistent inflation rates that Turkey experienced for more than twenty years is due to the similarly persistent growth in the quantity of money in circulation. On the other hand, any rise in productivity level would have boosted the living standards of Turkish people. As for the unemployment, a high level of unemployment is usually considered as the result of measures (such as cutting money supply) taken to control inflation. The correct answer is B.

More detailed planning is required to change the factors in A, B, D and E. Therefore, the correct option is C.

The practice of charging the maximum price for each unit sold is called perfect price discrimination. The correct answer is D.

1120509/157=7137

Total Revenue: the total amount of money received by a seller, which is equal to price times quantity sold. Therefore, the correct option is A.

The Substitute Goods

Substitute goods serve as replacements for one another. When the price of one rises, the demand for the other increases.

If the labor supply curve shifts left, it means there is not enough of supply. Migrations from an area has a negative effect on labor supply.  Therefore, the correct option is A.

When total product of labor is an increasing function at an increasing rate, marginal product of labor is an increasing function and higher than the average product of labor.

Economic Profit = Total Revenue – Total Economic Cost = Total Revenue – (Accounting Cost + Opportunity Cost) The correct answer is C.

Traditionally, four types of market structures have been defined based on the characteristics of the market, the number of firms in the market, the degree of product differentiation and the ease of entry and exit of firms into and out of the market. They are: Perfect competition, Monopolistic competition, Oligopoly, and Monopoly. E-shopping cannot be considered one of them. The correct answer is D.

A monopoly, in contrast to a competitive firm, charges a price above the marginal cost. The high price is undesirable for consumers since it reduces their consumer surplus. Compared to a perfectly competitive market, a monopoly produces less than the socially efficient quantity of output and charges a relatively higher price, hence creates a deadweight loss.

Our resources are limited relative to our needs, and this is true not only for individuals but also for societies. Scarcity refers to the society’s inability to produce all the goods and services people desire to have because of deficiency of resources.

The price elasticity of supply is determined by the flexibility of producers/sellers to change the amount of the good or service they produce in response to price changes. The flexibility of producers depends on two important factors. These factors are the availability of inputs to producers and the time horizon. The higher the availability of inputs for production, the higher the elasticity of supply. For example, the supply of beachfront property in Istanbul Bosporus or Mediterranean coasts is harder to vary and thus less elastic than the supply of new cars or computers. Supply is more elastic in the long-run than in the short-run. Over the short-run, the firms cannot easily change their plant size or factory size to change their production in response to price changes. The correct answer is B.