A firm combines two resources, A and B, to produce an output Q. Their respective marginal revenue products are $30 and $21. A costs $15 a unit and B $7 a unit. To reduce the cost of Q:
A. More B and less A should be used
B. More A and less B should be used
C. More of both resources should be used
D. Less of both resources should be used
A. More B and less A should be used
You might also like to view...
A bank's assets consist of $1,000,000 in total reserves, $2,100,000 in loans, and a building worth $1,200,000 . Its liabilities and capital consist of $3,000,000 in demand deposits and $1,300,000 in capital. If the required reserve ratio is 10 percent, what is the level of the bank's excess reserves? How much could it loan out as a result?
a. $700,000; $700,000 b. $700,000; $7,000,000 c. $300,000; $300,000 d. $300,000; $3,000,000
Which of the following statements best describes the parity concept?
A. The prices of farm commodities should vary inversely with changes in the prices-paid index for farmers. B. Because of productivity increases, farmers are entitled to the same real income for a smaller volume of output. C. The money incomes of farmers should always be the same, regardless of increases or decreases in the prices of the products they buy. D. The production of a given real output entitles the producer to the same real income over time.