Let the marginal product of labor and capital be denoted by MPL and MPK respectively. The price of labor and capital are given by PL and PK respectively. Which of the following equations gives the condition for producing a given level of output at the least cost combination of inputs?
a. PL × PK = MPL × MPK
b. PL × MPL = PK × MPK
c. MPL ÷ PK = MPK ÷ PL
d. PL ÷ PK = MPL ÷ MPK
D
You might also like to view...
For most goods and services the income elasticity of demand is
A) negative. B) positive. C) invisible. D) inverse.
In the above table, C is consumption expenditure, I is investment, G is government expenditure, and X - M is net exports. All entries are in dollars. The slope of the aggregate expenditure function is
A) -0.10. B) 0.10. C) 0.60. D) 0.70.
Economists favoring the rational expectations theory maintain that
A. market participants plan counterstrategies to what the Fed is planning to do. B. the Fed has no real short-term effect on output and employment unless it truly surprises markets. C. market participants anticipate government policies. D. All of the choices are correct.
What did Milton Friedman and E.S. Phelps argue with respect to the Phillips Curve?
A. The Phillips Curve could accurately guide activist policy makers over the long run. B. The inflation rate will consistently be 2 percentage points below the unemployment rate. C. The inverse relationship between unemployment and inflation only holds in the long run. In the short run, unemployment and inflation are positively related. D. Economic participants would soon understand activist policymakers' strategy and revise their expectations, making discretionary efforts to fine-tune the economy ineffective.