According to the Principle of Marginal Productivity, If

question 22

Multiple Choice

According to the principle of marginal productivity, if

• A) the product price is less than MRP, the firm is using too little of the input.
• B) the price of an input rises, the quantity demanded of the input will increase.
• C) MRP is greater than product price, the firm should reduce the use of the input.
• D) price of the input equals MRP, the firm is maximizing profit.

---

Definitions:

Privatization

The process of turning government enterprises into private enterprises.

U.S. Economy

The economic system of the United States, characterized by a mixed economy with private freedom combined with centralized economic planning and government regulation.

Marginal Propensity

The proportion of an additional amount of income that is used for consumer spending. It's a key concept in understanding how income changes affect spending.

Tax Rebate

A refund to taxpayers when the amount of taxes paid is greater than the amount of tax owed.