In the table above, if a unit of capital is $50 per day and an hour of labor is $15 per day, which method is economically efficient?
A) A
B) B
C) C
D) D
B
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Under a fixed exchange rate system, if the inflation rate in the United States is 5 percent a year and the inflation rate in Australia is 0 percent a year, then the U.S. real exchange rate will
A) increase 5 percent a year. B) decrease 5 percent a year. C) remain constant. D) possibly increase or decrease.
At a given price level, a decrease in consumer credit will shift the aggregate demand curve:
A) rightward. B) leftward. C) both. D) none of the above.
Figure 10-2
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Figure 10-2 shows demand and short-run cost curves for a perfectly competitive firm. At its profit-maximizing output, the firm’s total ____ is represented by area ____.
A. loss; GBHC B. profit; ADGHC C. loss; ADEC D. profit; EGH
Which of the following is a possible result of adverse selection?
a. Only lemons remain in the market for used cars. b. A store manager shirks his responsibility because his supervisor is not present at all times. c. A car mechanic does not bother to properly fix the customers' cars when his work cannot be monitored. d. Many people selling their houses at very low prices expecting prices to decline further.