Economists use the term "marginal" to describe costs and benefits:
a. that are poorly defined.
b. that are incremental and thus relevant to decision making.
c. that are minimal and hardly worth noting.
d. that are noteworthy but not the most important.
e. whose importance can be minimized through hard work.
b. that are incremental and thus relevant to decision making.
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A firm is employing capital and labor such that the marginal product of capital is 80 and the marginal product of labor is 20
If the price of a unit of capital is $30 and the price of a unit of labor is $15, is the firm minimizing its costs? If not, can you recommend a change for the firm to make in its relative amounts of labor and capital used? Explain.
Suppose the price of an airline ticket from Dallas to Boston costs $600 . A bus ticket costs $150 . Traveling by plane takes 6 hours compared with 51 hours by bus. Other things constant, an individual would gain by choosing air travel if, and only if, his time were valued at more than
a. $6 per hour. b. $8 per hour. c. $10 per hour. d. $15 per hour.