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.
D
You might also like to view...
Which of the following shifts the demand for money curve?
i. change in the nominal interest rate ii. change in real GDP iii. change in the price level A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
According to the life-cycle hypothesis,
A) the present value of lifetime consumption equals the future value of lifetime income. B) the income earned in a lifetime will be evenly divided between consumption and saving. C) household consumption depends on income that households expect to receive each year, and financial markets are used to smooth consumption in response to changes in transitory income. D) households use financial markets to transfer funds from periods when income is high to periods when income is low.
Merchant banks and land mortgage companies were the result of the expansions in the transportation and industrial systems
Indicate whether the statement is true or false
If the Federal Reserve increases the legal reserve requirement, banks are not obliged to comply
Indicate whether the statement is true or false