The Marginal Cost of a Productive Resource Is Equal to the Price

question 156

Multiple Choice

The marginal cost of a productive resource is equal to the price of the resource if a firm is

• A)a price taker in the output market.
• B)a price taker in the resource market.
• C)able to influence the price of the product by producing more or less of it.
• D)able to influence the price of the factor by buying more or less of it.

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Definitions:

Diminishing Marginal Utility

The decrease in satisfaction or benefit from obtaining one more unit of a good or service as one consumes more of it.

Reese's Peanut Butter Cups

A popular type of candy consisting of a milk, white, or dark chocolate cup filled with peanut butter, marketed by The Hershey Company.

Apples

Edible fruits produced by an apple tree, commonly consumed worldwide and used in a variety of culinary dishes.

Budget Constraint

The limitation that the cost of a consumer’s consumption bundle cannot exceed the consumer’s income.