Suppose a firm is hiring resources l and m under purely competitive conditions to produce product Y, which sells for $2 in a purely competitive market. The prices of l and m are $10 and $4 respectively. In equilibrium the MPs of l and m, respectively,
are:
A. 1 and 1.
B. 2 and 5.
C. 10 and 4.
D. 5 and 2.
Answer: D
Economics
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If a regulatory commission imposes upon a nondiscriminating natural monopoly a price that is equal to marginal cost and below average total cost at the resulting output, then:
A. the firm will realize an economic profit. B. the firm will earn only a normal profit. C. allocative efficiency will be worsened. D. the firm must be subsidized or it will go bankrupt.
Economics
If the interest rate is 8% and $1 will be paid to you in 3 years, what is the present value of that dollar (to the nearest tenth of a cent)?
What will be an ideal response?
Economics