Which of the Following Resources Will a Producer Demand Another

question 19

Multiple Choice

Which of the following resources will a producer demand another unit of so long as the additional unit's marginal revenue exceeds its marginal cost?

• A)labor
• B)capital
• C)natural resources
• D)entrepreneurial ability
• E)All of the answers are correct.

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Definitions:

Full Employment Output

The highest level of output an economy can achieve without causing inflation, when labor resources are fully employed.

The Classicals

Refers to the classical economists, a group that primarily includes thinkers like Adam Smith, David Ricardo, and John Stuart Mill, who focused on the ideas of free markets, the theory of comparative advantage, and the role of government.

Short Run

A period in economics during which some factors of production are fixed, typically under a year, making some adjustments impossible or difficult.

Long Run

A period in economics where all factors of production and costs are variable, allowing companies and industries to adjust to market changes.