A firm maximizes profits when the ________ equals the ________
A) actual marginal product of capital; actual marginal product of labor
B) actual marginal product of capital; expected marginal product of capital
C) expected marginal product of capital; the opportunity cost of capital
D) expected marginal product of capital; user cost of capital
D
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The elasticity of demand is used to
A) determine if consumers will or will not buy a product. B) measure how responsive consumers are to a change in price. C) determine in what direction the demand curve shifts if income changes. D) find the market equilibrium. E) determine if a change in price results in a shortage or a surplus.
How is a politician similar to an entrepreneur?
A) Each advances a project solely in the public interest. B) Each advances a project only if the expected marginal benefits equal the expected marginal costs. C) Each advances a project only if the expected marginal benefits exceed the expected marginal costs. D) Each advances a project only if they impose no negative externalities.