A profit-maximizing firm should hire an input as long as the
A. marginal revenue product of the input is at least as much as the cost of hiring the input.
B. marginal revenue product of the input is greater than the marginal revenue product of other inputs the firm is using.
C. price of the input doesn't exceed the price of the other inputs used in the firm's production.
D. firm can increase its total revenue.
Answer: A
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An example of a foreign direct investment (FDI) would include
A) a U.S. couple buying land for their dream retirement home in Costa Rica. B) a U.S. mutual fund manager buying shares of stock in a Brazilian oil company. C) a U.S. firm expanding its U.S. operations. D) a Chinese consumer buying an imported Japanese car. E) a wealthy Mexican buying U.S. Treasury bills.
One financial intermediary in our financial structure that helps to reduce the moral hazard from arising from the principal-agent problem is the
A) venture capital firm. B) money market mutual fund. C) pawn broker. D) savings and loan association.
The faster economic growth is, the
A. steeper the slope of the production possibilities curve. B. more bowed the production possibilities curve becomes. C. farther the production possibilities curve shifts out. D. closer to the origin the production possibilities curve becomes.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point E to Point A, the opportunity cost of hybrid cars, measured in terms of motorcycles
A. increases. B. initially increases, then decreases. C. decreases. D. remains constant.