The profit-maximizing combination of resources in a perfectly competitive situation occurs at the point at which
A) MRP of labor = price of labor (wage rate).
B) MRP of land = price of land (rental rate per unit).
C) MRP of capital = price of capital (cost per unit of service).
D) All of the above are correct.
D
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The equilibrium quantity will decrease and the price might rise, fall, or stay the same when the
A) demand and the supply of a good both increase. B) demand for a good increases and the supply of it decreases. C) demand for a good decreases and the supply of it increases. D) demand and the supply of a good both decrease.
The achievement of the optimal allocation of society's scarce resources requires that regulators set prices equal to firms marginal cost
a. True b. False
Economic growth can:
A. create less jobs compare to a stagnated economy. B. increase poverty overall. C. improve standards of living. D. reduce the price level in the economy.
"Net exports" rather than "exports" are included in demand/expenditures, because:
a. Actually, exports are included and not net exports because only exports are a source of demand. b. Imports are counted in personal consumption expenditures. Therefore, net exports instead of just exports are included in aggregate demand. c. Imported goods and services are a part of personal consumption, gross private domestic Investment, and government spending. Therefore, net exports instead of just exports are included in demand. d. Neither exports nor net exports is included in aggregate demand. e. None of the above.