Whenever the Ratio of Marginal Products to Input Prices Differs

question 5

Multiple Choice

Whenever the ratio of marginal products to input prices differs across inputs,

• A)The marginal products of inputs will adjust as input combinations change to correct for the inefficiency
• B)No change will necessarily follow because the process could still be at peak efficiency
• C)A firm's costs could be reduced by shifting input usage toward the input with the lower marginal product to price ratio
• D)Cost could be reduced by shifting input usage toward the input with the lower marginal product to price ratio

Understand the concept and significance of physical capital in production processes.

Explain the universal problem of scarcity across different societies.

Apply the concept of opportunity cost to everyday financial and non-financial decisions.

Understand the limitations and characteristics of different research designs, including correlational, experimental, and case studies.

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Definitions:

Capital Lease

A leasing arrangement in which the lessee assumes some risks and benefits of ownership of the asset being leased.

Financial Statement Effects

The impact of business transactions and events on the financial statements, affecting the balance sheet, income statement, and statement of cash flows.

Debt Covenants

These are conditions imposed by lenders (creditors) that borrowers (debtors) must agree to and adhere to as part of the terms of a loan agreement.

Computer System

A combination of hardware, software, and peripherals working together to execute specific tasks or processes.