Figure 7-17
Which of the following statements must be true when a firm makes choices that put it at point A in Figure 7-17?
a.
The firm is minimizing its cost of producing 100 units of output.
b.
The ratio of the marginal physical products of labor and of land equals the ratio of the prices of labor and of land.
c.
The firm first decided how much output to produce and then decided how to produce it.
d.
All of the above are true.
d
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The social cost of producing a good that generates negative externalities is the sum of the ________
A) average variable cost and average fixed cost of production B) average total cost and the marginal cost of production C) private cost and external costs of production D) total fixed cost and total variable cost of production
An example of a good that is both rival and excludable is
A) the defense services provided by a new stealth bomber. B) a pair of pants. C) a beautiful sunset. D) an uncrowded theme park such as Walt Disney World.