Suppose labor and capital are variable inputs. The wage rate is $20 per hour, the marginal product of labor is 30 units, the rental rate of capital is $100 per machine hour, and the marginal product of capital is 150 units
If the wage rate declines to $15 per hour, the firm employs more labor and the marginal product of labor declines to 20 units. Assuming the rental rate of capital remains the same, what happens to the amount of capital used by the firm? A) Decreases
B) Increases
C) No change
D) We do not have enough information to answer this question.
B
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Over time, the Phillips curve has:
a. remained stable. b. shifted downward. c. shifted upward. d. has become positively sloped.
If the exchange rate between the U.S. dollar and the Mexican peso went from $1 US = 9 peso to $1 US = 10 peso, then
a. American goods have become less expensive for Mexicans. b. Mexican goods have become more expensive for Americans. c. American goods have become more expensive for Mexicans. d. American exports to Mexico are likely to increase.
If a firm is experiencing economies of scale, then as the firm's output rises, its average total cost ________.
A. becomes negative B. falls C. rises D. does not change
A cartel is a group of firms that
A) produce differentiated products. B) produce products that are complements. C) agree to restrict output to boost their profit. D) agree to boost output to boost their profit.