If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75, and the price of the machinery per period is $25, in order to achieve optimal input proportions, the firm should use
A. more labor and less machinery.
B. more machinery and less labor.
C. more labor with the same amount of machinery.
D. the current combination.
Answer: D
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In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?
What will be an ideal response?
If the United States starts to import a good that had previously been produced in the United States, the market price of the good in the United States
A) rises. B) falls. C) remains constant. D) either remains constant or rises, depending on how whether the supply of the good stays the same or increases. E) There is not enough information to answer the question because we need to know if the market price in the United States had been above or below the world market price before trade began.
A budget constraint is:
A. a line that is composed of all the possible combinations of goods and services that maximize a consumer’s total utility. B. a line that is composed of the additional utility gained from consuming possible combinations of goods and services that a consumer can buy with his or her income. C. a line that is composed of all the possible combinations of goods and services that a consumer can buy with his or her income. D. a line that is composed of the total utility gained from consuming all possible combinations of goods and services that a consumer can buy with his or her income.
If the interest rate is 7.5 percent, then what is the present value of $4,000 to be received in 6 years?
a. $2,420.68 b. $2,591.85 c. $2,996.33 d. $3,040.63