Which of the following conditions is true when a producer minimizes the cost of producing a given level of output?
A. The MRTS is equal to the ratio of input prices, and the marginal product per dollar spent on all inputs is equal.
B. The marginal products of all inputs are equal.
C. The MRTS is equal to the ratio of input prices.
D. The marginal product per dollar spent on all inputs is equal.
Answer: A
You might also like to view...
Which of the following equations does NOT state a condition required for equilibrium output:?
A) Y = C(Yd) + I + G + CA(EP*/P,Yd) B) Y = C(Y - T) + I + G + CA(EP*/P,Y - T) C) Y = D(EP*/P,Y - T,I,G) D) R = R* + (EP/E) E) Y = D(EP*/P,Yd,I,G)
A firm that engages in efficient production
A) cannot produce the same output with fewer inputs. B) could produce the same output with fewer inputs if it wanted to. C) is not interested in profit maximization. D) uses old technology to minimize costs.
Assuming that households do not change their cash holdings and banks loan out all of their excess reserves, if the required reserve ratio (RRR) is 10 percent and the Fed purchases $2,000 worth of bonds from banks, how much money will be eventually created?
a. $1,800 b. $2,000 c. $9,000 d. $18,000 e. $20,000
The Lucas supply function states that real output can change from its fixed level
A. only if there is a positive price surprise. B. only if there is a negative price surprise. C. only if there is no price surprise. D. Both A and B are possible.