When the Marginal Revenue Product of an Input Is Less

question 110

Multiple Choice

When the marginal revenue product of an input is less than its price, the

• A) producer should expand the use of that input.
• B) price of the input will automatically rise in a free market.
• C) producer should reduce the use of that input.
• D) marginal physical product of that input must be below its average physical product.

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Definitions:

Empresario

An empresario was a person who had been granted the right to settle on land in exchange for recruiting and taking responsibility for new settlers in areas of Mexico, including Texas, in the 19th century.

Texas Settlement

The process and history of colonization and habitation in the region of Texas, involving various groups including Native Americans, Spanish, and Anglo-Americans.

Anglo-Americans

Individuals of English descent, especially those residing in the United States or those who have significantly contributed to American society and culture.

1820s

The decade spanning from January 1, 1820, to December 31, 1829, characterized by significant cultural, political, and technological changes worldwide.