When we solve the firm's dual production problem (i.e., maximize output subject to a cost constraint) by the method of Lagrange multipliers, the optimal value of the Lagrange multiplier equals the:
A) marginal product per unit cost of each variable input.
B) marginal product of capital.
C) marginal product of labor.
D) marginal cost of production.
A
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Suppose the average price of gasoline in the United States rose from $3 per gallon to $4 per gallon. Accompanying the increase in gas prices was a decrease in new automobile sales
Other things equal, if this trend continues, real GDP would likely ________ and the output gap would become ________. A) rise; more negative B) rise; less negative C) fall; more negative D) fall; less negative
At an output of 6, ATC = $30, MC = $25, MR = $25. At that output the firm is
A. maximizing its profits. B. minimizing its losses. C. operating at its break-even point. D. operating at its shutdown point.