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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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