If the ratio of marginal revenue product to marginal factor cost for labor is greater than that for capital, then:
a. the producer can maximize profit by hiring more units of capital.
b. the producer suffers losses by hiring more units of labor.
c. the producer does not alter the resource allocation.
d. the producer can maximize profit by hiring more units of labor.
e. the producer will earn above normal profit by hiring less units of labor.
d
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The entry of new firms into a perfectly competitive market shifts the demand curve outward.
Answer the following statement true (T) or false (F)
Some years ago New York City imposed rent controls in an effort to provide housing at "fair" prices for as many people as possible. The result was a serious shortage of housing and deterioration of existing rental properties. How would an economist have described the result in terms of economic efficiency?
Which of the following is NOT true about investment goods?
A.) They add to the nation's stock of capital. B.) They can be used to replace worn-out equipment. C.) They can expand the nation's production possibilities. D.)They increase the retirement benefits for individuals.
At the market equilibrium
a. quantity exceeds price b. excess demand equals excess supply (and both are zero) c. price and quantity are equal d. each seller produces at full capacity e. everyone who is represented along the demand curve buys the good