When two countries specialize and trade:
A. both can enjoy more output than either could produce on its own.
B. they can have consumption possibilities beyond their production possibilities.
C. surplus can be gained by both countries.
D. All of these are true.
D. All of these are true.
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In the long run in a monopolistically competitive market, a firm will, in theory,
A) earn economic profits. B) suffer losses. C) break even. D) earn zero accounting profits.
Answer the question on the basis of the following information: Suppose a firm hires both labor (L) and capital (C) under purely competitive conditions. The price of labor is P L and that of capital is P C . The marginal product of labor is MP L and that
of capital is MP C . The firm sells its product competitively at a price of P X . Refer to the given information. Which of the following must pertain if the firm is to minimize the cost of producing any output? A. MP C = MP L = P X . B. MP C = P C and MP L = P L . C. MP C /P C = MP L /P L . D. MP C /P X = MP L /P X .