According to the No Marginal Improvement Principle, if X* is the best choice, then:
A. MB must be no greater than MC at X* or else a small increase in the activity would increase net benefits.
B. MB must be no greater than MC at X* or else a small decrease in the activity would increase net benefits.
C. MB must be no less than MC at X* or else a small increase in the activity would increase net benefits.
D. the difference between MB and MC must be as great as possible.
A. MB must be no greater than MC at X* or else a small increase in the activity would increase net benefits.
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Output for a simple production process is given by Q = 2KL, where K denotes capital, and L denotes labor. The price of capital is $25 per unit and capital is fixed at 8 units in the short run. The price of labor is $5 per unit. What is the total cost of producing 80 units of output?
A. $233 B. $525 C. $200 D. $225
Marginal product is represented by:
A. the x-axis of the total production curve. B. the slope of the total production curve. C. total product minus the total cost. D. total revenue minus total cost.
Consider a perfectly competitive market. What do you expect to happen to the number of firms and firm profitability in the short run and long run if demand for the product falls?
What will be an ideal response?
If the exchange rate between the U.S. dollar and Japanese yen changes from $1 = 100 yen to $1 = 90 yen, then
A. U.S. auto producers and autoworkers will lose. B. All Japanese producers and consumers will lose. C. U.S. consumers of Japanese TV sets will benefit. D. Japanese tourists visiting the United States will benefit.