What is the profit-maximizing condition for a firm when trying to decide how much land touse forproduction?
What will be an ideal response?
A firm will pay for and use land as long as the revenue earned from selling the product produced on that land is sufficient to cover the price of the land. This means that the firm will use land up to the point where the marginal revenue product of land is equal to the price of land.
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Mary is willing to pay $50 for a Christmas tree, John is willing to pay $45 and Jeff is willing to pay $40. The price of a tree is $40. The total consumer surplus for Mary, John and Jeff taken together is
A) $15. B) $135. C) $40. D) $95. E) $120.
In the IS model, assuming that the real interest rate does not change, an increase in ________ leads to an increase in equilibrium saving by households
A) autonomous consumption B) taxes C) financial frictions D) all of the above E) none of the above