If a firm uses only capital and labor as inputs, then what should the firm do at a given rate of production if the marginal physical product of labor per last dollar spent is higher than the marginal physical product of capital per last dollar spent?
A) The firm should increase both the quantity of capital and the quantity of labor.
B) The firm should decrease both the quantity of capital and the quantity of labor.
C) The firm should increase the quantity of capital and reduce the quantity of labor.
D) The firm should decrease the quantity of capital and increase the quantity of labor.
Answer: D
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Inflationary tendencies and even hyperinflation in many Latin American countries have been exacerbated by the tendency of governments to
A) tax too heavily. B) regulate too heavily. C) print money to finance policies to stimulate the economy. D) keep out foreign competition. E) use industrial policies to foster growth.
The concept of market conduct includes such things as ____
a. pricing behavior of the firm or group of firms b. product policy of the firm or group of firms c. the degree of seller and buyer concentration in the market d. a and b only e. a, b, and c