Suppose a Competitive Firm in Both the Resource and Product

question 235

Multiple Choice

Suppose a competitive firm in both the resource and product markets is using inputs such that the marginal product of labor is 16 and the price of labor is $4 per unit, while the marginal product of capital is 12 and the price of capital is $3 per unit. At the maximum profit equilibrium point, the price of the product is

• A) $3.
• B) $4.
• C) $0.25.
• D) between $3 and $4.

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Definitions:

Sensorimotor Stage

The first of Piaget’s stages of cognitive development, characterized by coordination of sensory information and motor activity, early exploration of the environment, and lack of language.

Concrete Operational Stage

Piaget’s third stage, characterized by logical thought concerning tangible objects, conservation, and subjective morality.

Emerging Adulthood

Period of development, roughly spanning the ages of 18 to 25, during which time many young people in affluent nations attend college and graduate school, sort out identity issues, and create life plans.

Identity Issues

Psychological challenges or conflicts centered around one's sense of personal identity and uniqueness.