A Firm Is Operating with an Optimal Combination of Inputs

question 185

Multiple Choice

A firm is operating with an optimal combination of inputs.Suddenly the price of one input rises.The firm should

• A)buy less of that input and more of the other input.
• B)change its input mix so that the marginal physical product of the input whose price has risen falls and the marginal physical product of the other input rises.
• C)buy less of whichever input now has the highest money price and more of the other input.
• D)reduce its output.

---

Definitions:

Psychosexual Stages

Psychosexual stages are a core concept in Freudian psychology that outlines five stages of sexual development from infancy to adulthood, each characterized by the erogenous zone that is the source of a child's psychosexual energy.

Phallic Stage

A phase in Freud's psychosexual development theory, occurring from ages 3 to 6, where children's libido is centered on their genitalia and they develop sexual identification with the same-sex parent.

Theoretical Disagreement

A divergence in opinions or conclusions among experts within a scholarly or scientific field, often leading to debates and further investigation.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for concepts such as the collective unconscious and archetypes.