A production possibilities curve shows the relationship between the production of which two items?
(A) Farm goods and factory goods only.
(B) Any two categories of goods.
(C) Two types of factory goods only.
(D) Two types of farm goods only.
Ans: (B) Any two categories of goods.
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The long run is a period of time in which
A) all factors of production are variable. B) all factors of production are fixed. C) some but not all factors of production are fixed. D) some but not all factors of production are variable.
A company finds that for the next worker hired, the worker's VMP is less than the cost of the worker. In this case, to maximize its profit the company should
A) definitely hire the worker. B) perhaps hire the worker, depending on the relationship between the company's MC and MR. C) definitely not hire the worker. D) None of the above answers is correct.