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December 19, 2014

Homework Help: College microeconomics

Posted by sue on Tuesday, April 14, 2009 at 7:43pm.

Need some help with these questions....Thanks in advanced.

All profit-maximizing firms hire inputs up to the point where:
A) MRP = W
B) MR = MC
C) MP = W
D) MFC = MRP
E) MFR = MRC


4) A firmís marginal revenue product of labor curve
A) is steeper than its demand curve for labor.
B) is more elastic that its demand curve for labor.
C) lies below the firmís demand curve for labor.
D) is equal to the firmís demand curve for the product that labor can produce.
E) is the same as its demand curve for labor.


5) We assume that when a firm hires additional workers the marginal physical product of labor will
A) increase because more workers can always get more work done.
B) decrease because the new workers are likely to be less able than the previously hired ones.
C) not change because of the ceteris paribus assumption.
D) increase because large firms are more efficient.
E) decrease because each worker now has less capital and other resources to work with.



6) A firm's marginal factor cost describes
A) the increase in the firm's total revenue as one more unit of output is sold.
B) the change in total fixed cost which results from hiring one more unit of input.
C) the change in total variable cost which results from the production of an extra unit of output.
D) the change in total cost which results from using one more unit of an input.
E) the change in average total cost which results from selling one more unit of an input.


7) A change in the price of a resource will cause a change in the:
A) demand for the resource.
B) supply of the resource.
C) quantity demanded of the resource.
D) demand for the good the resource produces.
E) quantity supplied of the good the resource produces.


8) Suppose that the marginal revenue product of labor is currently 40 and the marginal revenue product of capital is 30. If both inputs have the same cost, the firm should:
A) increase both labor and capital proportionally to meet the cost minimization condition.
B) decrease both labor and capital proportionally to meet the cost minimization condition.
C) increase labor and reduce capital to meet the cost minimization condition.
D) increase capital and reduce labor to meet the cost minimization condition.
E) increase or decrease capital or reduce or increase labor to meet the minimization condition.

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