Suppose that MPL = 100 and MPK = 80. If W = 25 and R = 20, then a firm:
A. is producing its output at the lowest possible cost.
B. could reduce costs by employing more labor and less capital.
C. could reduce costs by employing more capital and less labor.
D. could minimize costs by employing more of both inputs.
A. is producing its output at the lowest possible cost.
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Refer to the scenario above. The income per capita of Country 2 in PPP-adjusted dollars is ________
A) $4,236 B) $12,655 C) $6,834 D) $5,985
What happens when a country runs a current account deficit?
What will be an ideal response?
Because the productivity of labor decreases as the quantity of labor employed increases
A) the quantity of labor a firm demands increases as the real wage rate decreases. B) the quantity of labor a firm demands increases as the money wage rate decreases. C) the labor demand curve shifts right as the real wage rate decreases. D) the aggregate production function shifts upward as the real wage rate decreases.
Tax Incidence
What will be an ideal response?