Assume a pencil manufacturer is employing resources C and D in such quantities that the MRPs of the last units hired are $80 and $50 respectively. The price of resource C is $90 and the price of D is $35. This firm:

A. should hire less of C and more of D.
B. should hire more of both C and D.
C. should hire less of both C and D.
D. is using the least-cost combination of C and D.

Answer: A

Economics

You might also like to view...

Firms that face downward-sloping demand curves for their output in the product market are called

A) price takers. B) price dictators. C) monopolists. D) price makers.

Economics

The balance-of-payments identity is an equation that shows that the value of:

A. net capital inflow equals the net capital outflow. B. payments from a country exceeds payments to a country. C. net exports equals the net capital outflow. D. imports must equal exports.

Economics