An independent trucker has to choose one of the four possible combinations of inputs listed below. The two inputs are drivers and machinery. If he buys expensive machinery, then he can hire fewer drivers to deliver the same output. The input combinations are Method 1: 20 drivers, 10 machines;Method 2: 50 drivers, 2 machines;Method 3: 100 drivers, 0 machines;Method 4: 10 drivers, 12 machines.Hiring a driver costs $10. Each machine costs $100. Which method should he use?
A. Method 3
B. Method 2
C. Method 1
D. Method 4
Answer: B
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If reserves in the banking system increase by $100, then checkable deposits will increase by $667 in the simple model of deposit creation when the required reserve ratio is
A) 0.01. B) 0.05. C) 0.15. D) 0.20.
An individual firm hiring labor in a competitive labor market faces a(n)
a. horizontal supply curve of labor b. backward-bending supply curve of labor c. downward-sloping supply curve of labor d. upward-sloping supply curve of labor e. vertical supply curve of labor
The term productive efficiency refers to:
A. any short-run equilibrium position of a competitive firm. B. the production of the product mix most desired by consumers. C. the production of a good at the lowest average total cost. D. fulfilling the condition P = MC.
The sale of Treasury securities by the Federal Reserve will, in general
A) not change the money supply. B) not change the quantity of reserves held by banks. C) increase the quantity of reserves held by banks. D) decrease the quantity of reserves held by banks.