"If the wage rate paid to one form of labor is twice the cost of another form of labor, the first type of labor must be twice as productive." Comment
Indicate whether the statement is true or false
true . Firms minimize cost by setting the ratio of marginal productivity per unit cost equally across all inputs. If one form of labor is twice as expensive as another, the firm will want the MP of the first type of labor to be twice that of the second.
You might also like to view...
The figure above shows the situation facing Smart Digit, Inc, a firm in monopolistic competition that produces calculators. What is the firm's economic profit per day?
A) zero B) between $1 and $700 C) between $701 and $900 D) more than $901
Aggregation allows economists to ________ at the cost of ________.
A. make normative statements; ignoring positive analysis B. see the details; obscuring the big picture C. see the big picture; obscuring the details D. make positive statements; ignoring normative analysis
The term ______ describes a situation where a ______ causes a reduction in the buying power of income, even though actual income has not changed.
a. intertemporal budget; lower price b. income effect; higher price c. intertemporal budget; higher price d. substitution effect; lower price
An economic model is a:
A. realistic version of an economic environment. B. detailed version of an economic issue. C. fictional representation of an entire economy. D. simplified representation of an economic environment.