A firm wants to minimize the total cost of producing 100 tons of dynamite. The firm uses two factors of production, chemicals and labor. The combination of chemicals and labor that minimizes production costs will be found where
A) the marginal products of chemicals and labor are equal
B) the ratio of the amount of chemicals used to the amount of labor used equals the ratio of the marginal product of chemicals to the marginal product of labor
C) the ratio of the amount of chemicals used to the amount of labor used equals the ratio of the price of chemicals to the wage rate
D) the production of an additional unit of dynamite costs the same regardless of whether chemicals or labor are used
E) none of the above
D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
In the above figure, using the slope across an arc, the slope of the curve between points b and c is
A) 1/3. B) -1/3. C) 3. D) -3.
Which of the following is most like money?
A) game arcade tokens B) board game "money" C) credit cards D) baseball trading cards E) frequent flyer miles
The marginal revenue product of capital is the
a. same as the marginal revenue product of labor if all resources are used b. same as the marginal physical product of capital in a perfectly competitive market c. change in the interest rate when a firm borrows $1 to buy new capital d. change in total revenue generated by an additional $1 of loanable funds e. price of adding one more machine to production