A firm is employing inputs such that the marginal product of labor is 25 and the marginal product of capital is 40. The price of labor is $5 and the price of capital is $8. If the firm wants to minimize costs, then it should:
A. Use more labor and less capital
B. Use less labor and less capital
C. Use less labor and more capital
D. Make no change in resource use
D. Make no change in resource use
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Many younger people eat peanut butter AND jelly, whereas many older people eat peanut butter OR jelly. This suggests that the cross elasticity of demand between peanut butter and jelly is
A) negative for youngsters and positive for oldsters. B) positive for youngsters and negative for oldsters. C) negative for youngsters and zero for oldsters. D) positive for youngsters and zero for oldsters.
A second-price auction
a. is also called a Vickrey auction b. is where bidders submit increasing bids until all but one remains c. is where the sole remaining bidder wins and pays his winning bid d. all of the above
The term "laissez faire" was given to a system of free markets by
a. twentieth-century American economists. b. a seventeenth-century Scottish economist. c. eighteenth-century French economists. d. nineteenth-century Italian economists.
Although checking deposits are considered money, they are actually
a. fictitious numbers in persons' checkbooks. b. backed by commodities like gold. c. not very useful for making payments. d. bookkeeping entries in bank balance sheets.