A firm is operating with an optimal combination of inputs. Suddenly the price of one input rises. The firm should
a. buy less of that input and more of the other input.
b. change its input mix so that the marginal physical product of the input whose price has risen falls and the marginal physical product of the other input rises.
c. buy less of whichever input now has the highest money price and more of the other input.
d. reduce its output.
a
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Just as indexing allows us to compare the cost of living across different periods of time, the ____________ is used to allow us to compare the cost of living across different locations.
A. consumer purchasing index B. purchasing power index C. producer purchasing index D. retail power parity
Improving the education level of the labor force will
A. shift the production possibilities curve inward. B. not shift the production possibilities curve since the total size of the labor force has not been changed. C. shift the production possibilities curve outward. D. cause a movement from a point inside the production possibilities curve to a point on the curve.
Citizen voters are typically ignorant of many political issues because
A) information is not a good. B) information is only a free good. C) information is a scarce good. D) politicians have always conspired to keep voters misinformed.
Guiseppe Vibrato was so sick of his job that he quit, and now spends his days at the tavern, saying he never wants to work again. Guiseppe is
A) a discouraged worker. B) a discouraged drinker. C) unemployed. D) neither employed nor unemployed.