Slopes of Lines Are Especially Important in Economics Because

question 197

Multiple Choice

Slopes of lines are especially important in economics because

• A) they measure marginal changes.
• B) they always tell us something about profits.
• C) positive slopes are always preferred to negative slopes.
• D) they always relate to resource and output scarcity.

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Definitions:

Optimum Resource Mix

The combination of inputs that allows a firm to produce output at the lowest possible cost.

Wage Rate

The amount of money paid to an employee per unit of time, often hourly or annually, for their work or services.

MRP of Labor

Marginal Revenue Product of Labor, which measures the change in total revenue that results from employing one additional unit of labor.

MRP of Land

The marginal revenue product of land refers to the additional revenue earned from the use of an extra unit of land, holding other factors constant.