Assume a firm is producing 1000 units of a good by using two inputs, capital and labor, whose per unit prices are $50 and $20
Assume also that the marginal physical product of the last unit of capital is 25 and the marginal physical product of the last unit of labor is 15. In order to minimize its costs of production, the firm should adjust its combination of inputs by employing more labor and less capital. Indicate whether the statement is true or false
TRUE
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Suppose the demand for rescue services in our national parks is perfectly inelastic. This fact would mean that a 31 percent increase in rescue fees leads to
A) a 31 percent decrease in the quantity demanded. B) a 31 percent increase in demand. C) a 31 percent decrease in demand. D) no change in the quantity demanded. E) a decrease in the quantity demanded to 0 rescues.
Which of the following is NOT held constant while moving along a supply curve?
A) expected future prices B) the number of sellers C) the price of the good itself D) prices of factors of production
The required reserve ratio for a bank is set by:
a. Congress. b. the bank itself. c. the Treasury Department. d. the banking system. e. the Federal Reserve.
Rapid population growth can threaten sustained economic growth if it: a. leads to diminishing marginal returns in production
b. remains unmonitored by government agencies. c. enables economies of scale in production to be exploited. d. leads to increased capital formation.