Ajax has just discovered that the marginal revenue product generated by the last worker hired was $125 while the marginal factor cost was $85. What should Ajax do?

A) Leave the level of production unchanged.
B) Increase the amount produced.
C) Reduce the amount produced.
D) Collect more information before making a decision.


Answer: B

Economics

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The demand for dollars in the foreign exchange market will increase (so that the demand curve shifts rightward) if

A) the U.S. interest rate differential falls. B) the expected future exchange rate falls. C) the exchange rate for the dollar falls. D) None of the above answers is correct.

Economics

Oscar and Felix are the only firms that clean offices in a large city. They agree to operate as a cartel. The payoff matrix above shows the economic profit that each firm can make. If the game is played only once, then ________

A) Felix and Oscar will each make $10 million economic profit B) Felix will comply and Oscar will make $12 million economic profit C) Felix and Oscar will each make $1 million economic profit D) Felix will cheat and Oscar will make -$2 million economic profit

Economics

All else equal, if individuals save less because inflation lowers returns on savings, this should ________ the supply of loanable funds and ________ the capital stock

A) increase; raise B) increase; reduce C) decrease; raise D) decrease; reduce

Economics

The supply curve for land is perfectly elastic

a. True b. False Indicate whether the statement is true or false

Economics