A firm chooses its profit-maximizing quantity of capital by
A) examining the total cost of capital equipment.
B) comparing the price of capital with the price of labor.
C) comparing the marginal revenue product of capital with the rental price of capital.
D) determining the rate at which the firm can borrow funds to purchase plant and equipment.
C
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Which of the following is reflected in the gross domestic product (GDP)?
a. The value of leisure time b. The value of illegal goods and services c. The value of final goods produced by firms d. The cost of depletion of natural resources e. The value of house maintenance performed by homeowners
In long-term job attachments, a worker's wage:
a. always exceeds his productivity. b. always falls below his productivity. c. is lower than his productivity at the beginning, then equals it, and then exceeds the same. d. is higher than his productivity at the beginning, then equals it, and then falls below the same.
Comparing a pure monopoly and a purely competitive firm with identical costs, we would find in long-run equilibrium that the pure monopolist's:
A. price, output, and average total cost would all be higher.
B. price and average total cost would be higher, but output would be lower.
C. price, output, and average total cost would all be lower.
D. price and output would be lower, but average total cost would be higher.
Consider a town with three residents. The residents' demand curves for various acres of a public park are shown below.
If the park is currently 2 acres, and land costs $20 per acre, the town should:
A. purchase two additional acres. B. purchase 4 additional acres. C. reduce the size of the park. D. not change the size of the park.