According to the principle of marginal productivity, if
a. the product price is less than marginal revenue product (MRP), the firm is using too little of the input.
b. the price of an input rises, the quantity demanded of the input will increase.
c. MRP is greater than product price, the firm should reduce the use of the input.
d. price of the input equals MRP, the firm is maximizing profit.
D
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The money cost of a particular good will approximate its opportunity cost if
A. there are serious distortions in the market. B. the market functions well. C. there is much specialization in the market. D. nations are exploiting the law of comparative advantage.
Implicit costs are
A. always greater in the short run than in the long run. B. composed entirely of variable costs. C. opportunity costs of using owned resources. D. equal to total fixed costs.
Refer to Table 2-4. What is Jack's opportunity cost of mowing a lawn?
A) one-half of a garden cultivated B) two lawns mowed C) two-thirds of a garden cultivated D) one and a half lawns mowed
Refer to Table 2-12. Does either Guatemala or Honduras have an absolute advantage and if so, in what product?
A) Honduras only has an absolute advantage in producing sailboats. B) Guatemala has an absolute advantage in producing both products. C) Guatemala only has an absolute advantage in producing canoes. D) Honduras only has an absolute advantage in producing canoes.