A firm employs 100 workers at a wage rate of $10 per hour, and 50 units of capital at a rate of $21 per hour. The marginal product of labor is 3, and the marginal product of capital is 5. The firm
A) is producing its current output level at the minimum cost.
B) could reduce the cost of producing its current output level by employing more capital and less labor.
C) could reduce the cost of producing its current output level by employing more labor and less capital.
D) could increase its output at no extra cost by employing more capital and less labor.
E) Both B and D are true.
C
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What factors will shift the aggregate expenditure function for a given level of real domestic income?
What will be an ideal response?
The gold standard fixes the:
a. future price of gold in terms of silver. b. price of gold in terms of international currencies. c. future price of silver in terms of gold. d. money supply in terms of paper currency. e. past exchange rate and the future exchange rate.
Based on the graphic showing the Lorenz Curve, which of the following would represent the most equal income distribution?
a. a straighter line to the left of the Lorenz curve for 1980
b. a line between the Lorenz curves for 1980 and 2017
c. a more curved line to the right of the Lorenz curve for 2017
d. a line that matched the Lorenz curve for 1980
The LM curve illustrates all combinations of domestic output levels and interest rates for which
A. the domestic money market is in equilibrium. B. there is a zero balance for the country's official settlements balance. C. there is full employment. D. the domestic product market is in equilibrium.