If a firm uses only capital and labor as inputs, then what should the firm do at a given rate of production if the marginal physical product of labor per last dollar spent is higher than the marginal physical product of capital per last dollar spent?
A) The firm should increase both the quantity of capital and the quantity of labor.
B) The firm should decrease both the quantity of capital and the quantity of labor.
C) The firm should increase the quantity of capital and reduce the quantity of labor.
D) The firm should decrease the quantity of capital and increase the quantity of labor.
Answer: D
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What happens if the Brazilian real appreciates relative to the U.S. dollar?
A) Brazilians will buy fewer U.S. goods, which generates an increase in the quantity supplied of dollars. B) The quantity demanded of reals increases as U.S. residents want to buy more Brazilian products. C) The quantity of reals supplied increases because the lower price (in reals) for U.S. goods induces Brazilians to buy more U.S. products. D) The U.S. Federal Reserve Bank increases the supply of dollars to the world economy.
The aggregate output demanded for a given price level occurs at the point where: a. an economy reaches the full employment of labor. b. aggregate expenditure equals real GDP
c. actual aggregate expenditures exceeds real GDP. d. inventories of goods and services are increasing. e. inventories of goods and services are decreasing.
Typically, total utility derived from consumption decreases as more of a good is consumed
Indicate whether the statement is true or false
When one country can produce a product at a lower cost in terms of other goods, that country is said to have
A. a comparative advantage. B. a productive advantage. C. an absolute advantage. D. an unfair advantage.