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When a firm employs 1 unit of factor X it produces 28 units of output and when it employs

When a firm employs 1 unit of factor X it produces 28 units of output and when it employs 2 units of factor X it produces 57 units of output. It follows that marginal revenue product of the second unit of factor X is

a.$22.00.

b.$29.00.

c.$0.53.

d.$114.

e.There is not enough information to answer the question.

 

 

 

120.When a perfectly competitive firm (that sells its good for $18 per unit) hires 1 unit of factor X it produces 35 units of output and when it hires 2 units of factor X it produces 55 units of output. Marginal revenue product of the second unit of factor X is equal to

a.$20.

b.$530.

c.$265.

d.$360.

e.none of the above

 

 

 

121.For a given firm, marginal factor cost is the same dollar amount no matter what quantity of a factor it purchases. This firm is a

a.product price taker.

b.product price searcher.

c.factor price taker.

d.factor price searcher.

e.none of the above

 

 

 

122.For a given firm, marginal factor cost is the same dollar amount no matter what quantity of a factor it purchases. For this firm,

a.VMP = MRP.

b.VMP > MRP.

c.MRP > VMP.

d.MPP necessarily declines beginning with the first factor unit.

e.none of the above

 

 

 

123.If there are two factors used in producing a good, the least-cost rule specifies that costs have been minimized when

a.the MPP of the first factor divided by its price is equal to the MPP of the second factor divided by its price.

b.the MPP of the first factor multiplied by its price is equal to the MPP of the second factor minus its price.

c.the MPP of the first factor divided by the price of the second factor is equal to the MPP of the second factor divided by the price of the first factor.

d.the MPP of the second factor minus the MPP of the first factor is equal to the price of the second factor minus the price of the first factor.

e.none of the above

 

 

 

124.The MPP of labor divided by its (labor's) price is greater than the MPP of capital divided by its (capital's) price. Costs can be minimized by

a.buying more capital and less labor.

b.buying more labor and less capital.

c.maintaining the current MPP/P ratios.

d.buying twice as much labor as capital.

e.none of the above

 

 

 

125.As a firm buys more capital and less labor, the marginal physical product of capital __________ and the marginal physical product of labor __________, assuming the law of diminishing marginal returns has set in for each factor.

a.decreases; increases

b.increases; increases

c.decreases; decreases

d.increases; remains constant

e.remains constant; decreases

 

 

 

126.When deciding whether a person is "worth" a certain salary, economists will want to compare a person's __________ with his or her wage or salary.

a.marginal physical product

b.marginal revenue product

c.marginal factor cost

d.derived demand

e.none of the above

 

 

 

127.The MPP/Price ratio for labor is 25/$5 and the MPP/Price ratio for capital is 30/$6. A firm that employs both labor and capital will likely

a.buy more labor and less capital because labor is cheaper.

b.buy more capital and less labor because capital is more productive.

c.maintain the current combination of capital and labor.

d.buy more capital and less labor because capital is cheaper.

e.There is not enough information to answer the question.

Dec 09 2019 Read more Less More

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