Assume a firm produces 500 units of a good by using two inputs, capital and labor, whose per unit prices are $10 and $4
Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10. Is this firm minimizing its costs of producing 500 units of output? A) No, because the marginal products of the two inputs are not equal.
B) No, because the MRTS and the price ratio for the two inputs are not equal.
C) No, because the prices of the two inputs are not equal.
D) The answer cannot be determined without more information.
B
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The price of a financial asset equals the
A) future value of all payments B) sum of all payments C) present value of all future payments D) difference between the future value and present value of all payments
In the above table, if the marginal revenue product is $22, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?
A) 5; $18 B) 3; $14 C) 4; $22 D) 4; $16
If the MPC is .5, the multiplier is
A. .5. B. 1. C. 2. D. 4.
Which rationing system leads to the most efficient use of available resources?
A. random assignment B. physical force C. free market D. first come, first served