With its current levels of input use, a firm's MRTS is 3 (when capital is on the vertical axis and labor is on the horizontal axis). This implies
A) the firm could produce 3 more units of output if it increased its use of capital by one unit (holding labor constant).
B) the firm could produce 3 more units of output if it increased its use of labor by one unit (holding capital constant).
C) if the firm reduced its capital stock by one unit, it would have to hire 3 more workers to maintain its current level of output.
D) if it used one more unit of both capital and labor, the firm could produce 3 more units of output.
E) the marginal product of labor is 3 times the marginal product of capital.
E
You might also like to view...
Use the following table, which shows the supply and demand schedules for the euro, to answer the next question.Quantity of Euros SuppliedPriceQuantity of Euros Demanded400$1.101003601.002003000.903002860.804002670.70500Under a flexible exchange rate system, what will be the rate of exchange for one euro?
A. $0.80 B. $1.00 C. $0.90 D. $1.10
The actual real wage must be below the equilibrium real wage in order to encourage firms to produce at any output level above the natural rate
Once workers realize this situation, their expected price level will gradually rise and they will demand a higher nominal wage. This description of a business cycle adjustment is part of which of the following theories? A) Classical model B) original Keynesian model C) Friedman fooling model D) the RBC model
If an employer calls an applicant's prior employer to inquire about their work ethic, this is an example of ________.
A) the principal-agent problem B) screening C) self-revelation D) certification
Which of the following is responsible for controlling the money supply in the United States?
A. U.S. Congress B. Board of Governors of the Federal Reserve System C. U.S. Treasury D. Council of Economic Advisors