Assume a Firm Purchases Resources a and B Under Purely

question 63

Multiple Choice

Assume a firm purchases resources a and b under purely competitive conditions and combines these resources to produce X. Product X is sold in a purely competitive market. The MPs of a and b are 6 and 3, respectively, and the prices of a and b are $12 and $6, respectively. If equilibrium exists, the price of X will be

• A) $1.
• B) $0.50.
• C) $2.
• D) $5.

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Definitions:

Absolute Standard

A fixed criterion of measure that remains unchanged over time and under different conditions.

Perception Error

A mistake in interpreting or understanding information received from the environment due to biases, incorrect information, or misinterpretation.

Cross-Cultural Negotiations

The process of discussing and coming to an agreement between parties from different cultural backgrounds.

Social Connections

The relationships and networks that individuals form with others.