What happens to the marginal revenue product curve of a factor as more of a complementary factor is hired?
A) It shifts to the left, because its marginal product decreases.
B) It shifts to the left, because its marginal product increases.
C) It shifts to the right, because its marginal product decreases.
D) It shifts to the right, because its marginal product increases.
D
You might also like to view...
Why are elected representatives far more likely to be informed about the issues on which they vote, compared to the typical citizen-voter?
A) A politician loves politics; citizens hate it. B) A politician is more patriotic than citizens. C) A politician is rationally ignorant; citizens are just plain ignorant. D) A politician's vote has a far greater probability of affecting the outcome, compared to a citizen's vote.
Mike wants to open his own repair shop, and is considering using his savings of $30,000 to get it started. He is currently earning 3 percent interest on his savings. His friend Bob calls him and asks to borrow $30,000 to start up a bagel shop; Bob offers to pay him 5 percent interest if he loans him the money. If Mike were to use the money to open his own repair shop, how can he accurately account for his costs?
A. Mike must consider the $900 in forgone interest on his savings as an implicit cost. B. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an implicit cost. C. Mike must consider the $900 in forgone interest on his savings as an explicit cost. D. Mike must consider the $1,500 in forgone interest from loaning the money to Bob as an explicit cost.