A manager of a clothing firm is deciding whether to add another factory in addition to one already in production. The manager would compare
a. The total revenue gained from the two factories to the total costs of running the two factories
b. The marginal revenue expected from the second factory to the total costs of running the two factories.
c. The marginal revenue expected from the second factory to the marginal cost of the second factory.
d. The total revenue gained from the two factories to the marginal costs of running the two factories.
c
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Monetary policy has no effect on the equilibrium interest rate if
A) the inflation rate is zero. B) the economy is in the liquidity trap. C) velocity is constant. D) the economy is at full employment.
The method of constructing a measure of technological progress relies on which of the following assumptions?
A) each factor of production is paid its marginal product B) population growth does not change C) population growth is zero D) the saving rate does note change