If a firm wants to maximize profits it should
A. hire lots of capital and very little labor since labor needs to be trained.
B. equate the marginal revenue product for each input to the price of the input.
C. equate the marginal product for each input to the price of the input.
D. hire unskilled labor rather than skilled labor since unskilled labor is cheaper.
Answer: B
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Which of the following statements is NOT true about the rationing of goods?
A) Goods can only be rationed by price. B) Goods can be rationed on a first come first serve basis. C) Goods can be rationed by random. D) Goods can be rationed by the use of coupons.
A large open economy
A) dominates world trade in one or more products. B) is physically larger than all small open economies. C) has a larger population than all small open economies. D) lends or borrows enough in the international capital market to influence the world real interest rate.
Economic regulation of business is justified if, by intervening, government can
a. improve the allocation of resources in society b. create economic rents for special interest groups c. reduce output and increase prices for an industry d. increase tax revenue from the regulated industry e. force firms to increase their costs of production
Specialization is a major obstacle to international trade
a. True b. False Indicate whether the statement is true or false