If the marginal physical product (MPP) of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use
a. more labor and less machinery.
b. more machinery and less labor.
c. more labor with the same amount of machinery.
d. the current combination.
D
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Cross-price elasticity of demand measures how the quantity demanded of one good changes as the price of another good changes
a. True b. False Indicate whether the statement is true or false
Figure 9.2 represents the market for used cameras. Suppose buyers are willing to pay $125 for a plum (high-quality) used camera and $25 for a lemon (low-quality) used camera. If buyers believe that 50% of used cameras in the market are lemons (low quality), how many plums (high quality) will be supplied by sellers?
A. 10 B. 15 C. 20 D. 25
The income elasticity of demand is
A. the percentage change in demand divided by the percentage change in income. B. the change in quantity demanded divided by the change in price. C. the percentage change in income divided by the percentage change in quantity demanded. D. the change in income divided by the percentage change in price.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The best point for society would be
A. either Point B or Point C, as the total amount being produced at either of these points is approximately the same. B. at any of the labeled points, as all of the points represent an efficient allocation of resources. C. Point C, as at this point there are approximately equal amounts of LCD and OLED televisions being produced. D. indeterminate from this information, as we don't have any information about the society's desires.