If the product derived from the last dollar spent on labor is less than the product derived from the last dollar spent on capital, then the firm
A. should use more labor and less capital to minimize costs.
B. should use less labor and more capital to minimize costs.
C. is minimizing costs.
D. should increase the price paid to labor and decrease the price paid to capital to minimize costs.
Answer: B
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If short-run equilibrium output equals 50,000 and potential output (Y*) equals 45,000, then this economy has a(n) ________ gap that can be closed by ________.
A. expansionary; decreasing government purchases B. expansionary; increasing transfer payments C. expansionary; decreasing taxes D. recessionary; increasing government purchases
Refer to the figure above. Assuming that the market consists of only these two consumers, what is the market demand for pens when the price is $4?
A) 15 units B) 25 units C) 40 units D) 65 units
Define a variable and give two examples that would apply to economics
What will be an ideal response?
Andy observes that the income distribution between the richest and poorest people in the population has remained fixed for decades. He concludes that the rich stay rich and the poor stay poor. Is this a valid conclusion, or has Andy missed something?