With its current levels of input use, a firm's MRTS is 3 (when capital is on the vertical axis and labor is on the horizontal axis). This implies
A) the firm could produce 3 more units of output if it increased its use of capital by one unit (holding labor constant).
B) the firm could produce 3 more units of output if it increased its use of labor by one unit (holding capital constant).
C) if the firm reduced its capital stock by one unit, it would have to hire 3 more workers to maintain its current level of output.
D) if it used one more unit of both capital and labor, the firm could produce 3 more units of output.
E) the marginal product of labor is 3 times the marginal product of capital.
E
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The J-curve effect means that import prices are higher, thus revenues paid out increase while export prices are lower and incoming revenues decrease. Therefore, after a currency depreciation:
a. the trade balance will improve, then decline, then improve, and then decline, appearing to be a series of J shapes. b. the trade balance will increase, then decrease, then jump higher, which economists call the J-curve effect. c. the nation will cut back on imports immediately causing the trade balance to improve, which gives the curve an inverted J shape. d. the trade balance decreases and then increases over time giving the curve a J shape.
Goods and services are exchanged in
a. product markets b. resource markets c. inventory markets d. classified markets e. government markets