A firm hires labor, capital, and land to produce tomatoes. Currently the marginal product of the last unit of labor input is 20, the marginal product of the last unit of capital input is 30, and the marginal product of the last unit of land input is 100. The market wage is $10 and the market price for capital is $15. If the firm is using the optimal combination of inputs, then the price of land is
A. $2.
B. $20.
C. $50.
D. indeterminate from the given information.
Answer: C
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Differences in size of real GDP across countries are best explained by
A. Large farming sector. B. Population growth. C. Human capital. D. None of the choices are correct.
If aggregate hours are 100 billion hours and labor productivity is $40 an hour, than real GDP equals
A) $100 billion. B) $40 billion. C) $100 trillion. D) $2.5 trillion. E) $4 trillion.
Alexis de Tocqueville observed in his Democracy in America: "There is no country in which everything can be provided for by the laws, or in which political institutions can prove a substitute for
A) common sense and morality." B) economic development." C) police and prisons." D) supply and demand." E) the private pursuit of private interests."
If there are 2 identical firms in a market that choose the quantity they produce, total welfare is the highest when there is a cartel
Indicate whether the statement is true or false