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Author Question: The market price of physical capital is 10 and the market wage rate is 5. If a firm is optimally ... (Read 88 times)

mckennatimberlake

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on: Jun 29, 2018
The market price of physical capital is 10 and the market wage rate is 5. If a firm is optimally hiring an additional unit of physical capital, the value of the marginal product of physical capital is:
 
  A) 1.
  B) 2.
  C) 10.
  D) 50.

Question 2

What is a tradeoff? Give an example.
 
  What will be an ideal response?


14vl19

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

A tradeoff occurs when one thing must be given up to get another. Tradeoffs are pervasive; at the personal level, students tradeoff time spent studying for time they otherwise could have spent socializing.


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