Author Question: If the value of marginal product of a factor of production exceeds the price of the factor, the ... (Read 83 times)

EAugust · **on:** Jun 29, 2018

If the value of marginal product of a factor of production exceeds the price of the factor, the

A) firm should hire more of that factor.
B) firm should hire less of that factor.
C) firm is maximizing profits.
D) firm should shut down.

Question 2

Tom takes 20 minutes to cook an egg and 5 minutes to make a sandwich. Jerry takes 15 minutes to cook an egg and 3 minutes to make a sandwich. Tom has a comparative advantage in ________ and Jerry has a comparative advantage in ________.

A) cooking eggs; making sandwiches
B) making sandwiches; cooking eggs
C) neither of these activities; both activities
D) both activities; neither of these activities