The Cost-Minimizing Rule Is That a Firm Should Utilize Inputs

question 236

Multiple Choice

The cost-minimizing rule is that a firm should utilize inputs such that the marginal physical product of an input divided by the price of the input is the same for all inputs. This is also the profit-maximizing rule because

• A) we obtain the profit-maximizing rule by multiplying each ratio by the marginal revenue produced.
• B) we obtain the profit-maximizing rule by multiplying each ratio by the product price, which is the same for each input.
• C) the profit-maximizing rule is just the inverse of the cost-minimizing rule.
• D) they are exactly the same.

Comprehend the different types of organizational cultures and how they impact concern for people and performance.

Recognize the challenges new employees face in bureaucratic organizations in terms of contributing to basic operating rules and procedures.

Identify how employee behavior can vary within organizations and the factors influencing ethical and unethical conduct.

Understand the differentiation between relatedness and growth needs and how they are satisfied within an organizational context.

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Definitions:

Limited Partner

An investor in a partnership who has limited liability to the extent of their investment and does not take part in day-to-day management.

Participates in Management

Involvement in the decision-making processes and operations of an organization or company.

Liability

The state of being responsible for something, especially by law, including debts or legal obligations.

Limited Liability Partnership

A partnership in which some or all partners have limited liabilities, protecting them from personal responsibility for the debts of the business.