Let MP = marginal product, P = output price, and W = wage, then the equation that represents a situation where a competitive firm should lay off some workers to maximize profits is

The opportunity cost of producing more of one good on a production possibilities frontier is

A) a dollar amount. B) a ratio of quantities. C) a ratio of prices. D) equal to the area inside the production possibilities frontier. E) a theoretical concept which cannot be measured.

Which of the following is the best example of a quota?

A) a limit on the quantity of residential air conditioners that can be imported from a foreign country B) a $150 fee imposed on all imported residential air conditioners C) a tax placed on all residential air conditioners sold in the domestic market to help offset the impact of emissions on the environment D) a subsidy from the U.S. government to domestic manufacturers of residential air conditioners to enable them to compete more effectively with foreign producers