A firm will hire a unit of input up to the point where
A) the marginal cost of the input equals the marginal cost of output.
B) the marginal revenue product of the input is equal to the marginal factor cost of the input.
C) the price of the input is equal to the price of output.
D) the marginal physical product of the input is equal to the price of output.
Answer: B
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As more capital per worker is added, the curve of the per-worker production function ______.
a. becomes flatter
b. becomes more curved
c. rises sharply
d. falls sharply
Refer to the graph shown. Given the long-run average cost curve, a seller must produce 18 units just to break even if the price the seller expects is roughly:
A. $52. B. $54. C. $50. D. $58.
From the late 1960s to the late 1990s, the share of GDP devoted to government purchases
A. drifted gradually downward. B. increased, but only after the onset of a war or a military buildup. C. remained fairly steady. D. drifted gradually upward.
Which of the following will increase commercial bank reserves?
A. The purchase of government bonds in the open market by the Federal Reserve Banks. B. An increase in the discount rate. C. A decrease in the reserve requirement. D. An increase in the federal funds rate.