What is not true when thinking of the firm's objective as a cost-minimization problem rather than as a profit-maximization problem?
A. The slope at any point on any isoquant reveals the marginal rate of technical substitution.
B. The firm chooses to employ either labor or capital, depending on which factor is cheaper.
C. The price of the output good does not enter the decision of how much labor or capital to employ once the total amount of output to produce has been determined.
D. The firm chooses a particular level of output to produce.
E. The firm will choose labor and capital inputs so that the marginal productivity of labor relative to the marginal productivity of capital equals the price of labor relative to the price of capital.
Answer: B
You might also like to view...
Refer to Table 2-2. Assume Nadia's Neckware only produces ascots and bowties. A combination of 16 ascots and 6 bowties would appear
A) along Nadia's production possibilities frontier. B) inside Nadia's production possibilities frontier. C) outside Nadia's production possibilities frontier. D) at the horizontal intercept of Nadia's production possibilities frontier.
When a payroll tax is enacted, the wage received by workers
a. falls, and the wage paid by firms rises. b. falls, and the wage paid by firms falls. c. rises, and the wage paid by firms falls. d. rises, and the wage paid by firms rises.
What is the definition of producers' surplus?
A) price received minus maximum selling price B) maximum selling price minus price received C) price received minus minimum selling price D) highest price minus lowest price E) none of the above
Direct controls
A. rely on the criminal justice system for enforcement. B. will be successful if a penalty is put in place. C. can easily be enforced. D. is a comparable method to emissions taxes.