A firm will hire a unit of input up to the point where
A. the marginal physical product of the input is equal to the price of output.
B. the marginal revenue product of the input is equal to the marginal factor cost of the input.
C. the marginal cost of the input equals the marginal cost of output.
D. the price of the input is equal to the price of output.
Answer: B
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Suppose that the U.S. can make 15 cars or 20 bottles of wine with one year's worth of labor. France can make 10 cars or 18 bottles of wine with one year's worth of labor. From these numbers, we can conclude
a. the U.S. has a comparative advantage in the production of cars. b. France has a comparative advantage in the production of wine. c. the U.S. has a absolute advantage in the production of wine. d. all of the above are conclusions are correct.
The short-run cause of structural stagnation is tied to:
A. the financial crisis aftermath. B. globalization. C. exchange rates. D. the trade deficit.