When the representative firm maximizes profits A) production ...

[luvbio]

When the representative firm maximizes profits
 
  A) production is at its maximum.
  B) the slope of the production function is at its flattest.
  C) labor costs are minimized.
  D) the marginal product of labor equals the wage.

Question 2

The Congressional Budget Office projects that Social Security spending will rise from 5 of GDP to 6 over the next four decades. Why is that a problem?
 
  What will be an ideal response?

[shoemake]

Answer to Question 1

D

Answer to Question 2

The dependency ratio  the ratio of benefits-eligible retirees to contributing workers  has declined, due to improved longevity and a falling birth rate. Though the total of benefits to be paid is not rising rapidly, relative to GDP, the tax base is not growing fast enough to fund the existing system.