A firm's marginal product of labor is 4 and its marginal product of capital is 5. If the firm adds one unit of labor, but does not want its output quantity to change, the firm should
A) use five fewer units of capital.
B) use 0.8 fewer units of capital.
C) use 1.25 fewer units of capital.
D) add 1.25 units of capital.
B
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If the price received by a perfectly competitive firm is less than its average variable cost, what will the firm do in the short run? Why?
What will be an ideal response?
In the two-gap model, which of the following gaps, when binding, leads to foreign aid having the largest impact on GNP?
(a) Fiscal gap. (b) Savings gap. (c) Foreign exchange gap. (d) None of the above.
You have the following demand equation for a pack of cigarettes: Q = 200 - 0.30P with the average quantity 3 packs and average price $3.00 per pack. What is the price elasticity?
A) 0.30 B) -0.30 C) 1.0 D) -1.0
Outsourcing is a logical extension of David Ricardo's 1817 _____________
a. Theory of Pro-Active Stress b. Peter Principle c. Theory of Comparative Advantage d. Theory of Dometic Economics