"The Firm Hires the Factor Up to the Point Where

question 494

Multiple Choice

"The firm hires the factor up to the point where the value of the factor's marginal product is equal to the factor's price." This statement applies to which factor of production?

• A)labor only
• B)land only
• C)capital only
• D)land, labor, and capital

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Definitions:

S And D Curves

In economics, the supply and demand curves which graphically represent the relationship between the quantity of goods that producers are willing to sell and consumers are willing to buy at different price levels.

Consumer Surplus

The contrast between the total price consumers are willing to pay for a good or service and the actual amount paid.

Equilibrium Point

In economics, it refers to the state where market supply equals demand, resulting in a stable price and quantity.

S And D Curves

Supply and Demand curves; graphical representations of the relationship between the quantities of goods and services that producers are willing to sell and consumers are willing to buy at various prices.