Suppose a Factor Price Taker Purchases One Unit of Factor

question 157

Multiple Choice

Suppose a factor price taker purchases one unit of factor X for $10. At what price would it purchase the second unit, and what would marginal factor cost (MFC) equal?

• A)It would purchase the second unit for $10, and MFC equals $10.
• B)There is not enough information to know what it would purchase the second unit for, and thus we do not know what MFC equals.
• C)It would purchase the second unit for $10, but there is not enough information to know what MFC equals.
• D)There is not enough information to know what it would purchase the second unit for, but MFC equals $10.

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Definitions:

Trade Usage

Customary practices and norms adopted by a particular industry or commerce sector that can influence the interpretation and enforcement of contracts.

Statute Of Limitations

A statute prescribing the maximum time after an event within which legal proceedings may be initiated, based on the nature of the claim or case.

UCC

The Uniform Commercial Code represents an extensive collection of regulations that oversee business deals within the United States.

Breach

The violation or breaking of a law, duty, or agreement, especially concerning contracts.