A profit-seeking firm will choose the combination of inputs that maximizes profit, based on the:
A. ratio of each factor of production.
B. substitutability of each factor of production.
C. local price of each factor of production.
D. total productivity of each factor of production.
C. local price of each factor of production.
You might also like to view...
The change in cost that results from a one-unit increase in output is called the
A) average fixed cost. B) per-unit variable cost. C) per-unit total cost. D) marginal cost. E) average cost change.
Which of the following is a characteristic of entrepreneurship?
a. the ability to navigate bodies of water b. it is produced using physical capital c. it is used up quickly in the production process d. it is a pre-existing resource like land e. it is associated with risk taking and innovation
If a bank’s assets are $500 million and its liabilities are $380 million, then its net worth (bank capital) is ____________________. If the bank’s assets then rise by 6 percent at the same time that its liabilities rise by 5 percent, the percentage change in the bank’s net worth will be approximately _______________ percent.
A. $440 million; 10.2 B. $120 million; 1.2 C. $100 million; 11.2 D. $120 million; 9.2
Suppose Cournot duopolist firms operate with each having a cost of 30qi (i = 1,2 ) so that each firm's marginal cost is 30. The inverse market demand curve is P = 120 - Q where Q = q1 + q2. Suppose there were no barriers to entry and firms continued to enter so long as there were positive economic profits. At the Nash-Cournot equilibrium, the total output, Q, is
A) 30. B) 45. C) 60. D) 90.