Author Question: An ideal cost-of-living index measures: A) The relative cost of maintaining a particular utility ... (Read 82 times)

nelaaney · **on:** Jul 1, 2018

An ideal cost-of-living index measures:

A) The relative cost of maintaining a particular utility level.
B) The relative changes in consumer satisfaction that arise from price increases.
C) The relative price of those goods that are considered to be necessities in consumption.
D) none of the above

Question 2

A firm employs 100 workers at a wage rate of 10 per hour, and 50 units of capital at a rate of 21 per hour. The marginal product of labor is 3, and the marginal product of capital is 5. The firm

A) is producing its current output level at the minimum cost.
B) could reduce the cost of producing its current output level by employing more capital and less labor.
C) could reduce the cost of producing its current output level by employing more labor and less capital.
D) could increase its output at no extra cost by employing more capital and less labor.
E) Both B and D are true.