The Rule for the Optimal Use of Any Input Says

question 36

Multiple Choice

The rule for the optimal use of any input says that

• A)when MRP is less than price, it pays to expand resource use.
• B)when MRP is greater than price, it pays to expand resource use.
• C)when MRP equals price, resource use should be cut back.
• D)resources should be used only if MRP exceeds price.

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Definitions:

Price Index

A statistical measure that examines the weighted average of prices of a selected basket of goods and services over a period, used to track inflation or deflation.

Social Security Payments

Government-provided financial assistance to people with inadequate or no income, especially the elderly or disabled.

Real Interest Rate

The rate of interest an investor expects to receive after allowing for inflation, reflecting the true cost of borrowing and the real yield on an investment.

Purchasing Power

A currency's value measured by the volume of goods or services purchasable with one monetary unit.