The price of capital is $12 per machine-hour and the price of labor is $3 per hour. Below are production schedules for a firm showing the possible combinations of capital and labor that will produce 100 units of output. Which combination will this cost-minimizing firm choose?
A. Choice A
B. Choice B
C. Choice C
D. Choice D
A. Choice A
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Using average price and average quantity, calculate the price elasticity of demand if a price rise from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals
A) 2.5. B) 1.29. C) 0.78. D) 0.06
Two of the firms involved in the accounting scandals of the early 2000s were
A) WorldCom and Enron. B) Arthur Anderson and NBC. C) DuPont and Lehman Brothers. D) Western Digital and General Motors.
Perfect competition describes a firm's behavior in a market model where:
a. there are few firms producing identical products. b. there are few firms producing highly differentiated products. c. there are many firms producing identical products. d. there are many firms producing highly differentiated products. e. there are barriers to entry and exit for the new firms.
For the output maximizing monopolist
A. long-run marginal cost equals demand. B. marginal revenue equals marginal cost. C. price equals average total cost. D. average total cost must be falling.