Question

charterll from the sale of output input is known as The change in revenue that results from th by one additional unit of an input is ki a) Total physical product b) Profit c) Marginal physical product d) Marginal revenue product in the market where it sells its For a firm that is a price-taker in the market where it output, a) the menu of price-quantity combinations is given negatively-sloped demand curve for output. b) marginal is always less than price. c) marginal revenue product is equal to the value of marginal product d) Both a) and c) For a firm that is a simple monopolist in the market where it sells its output, marginal revenue product is a) less than the value of marginal product. b) equal to the value of marginal product. c) greater than the value of marginal product. d) greater than or less than marginal product, depending on the elasticity of demand for inputs. The cost of obtaining each additional unit of a resource is known as the a) Marginal revenue product b) Marginal resource cost c) Marginal physical product d) Value of marginal product If marginal revenue product exceeds marginal resource then hiring one more unit of a resource leads to a) a decrease in total revenue. b) an increase in total cost. c) an increase in profit. d) Both b) and c), but not a)

Answer 1

(1) (d)

MRP = Change in revenue / Change in input = MR x MP

(2) (c)

MRP = MR x MP

VMP = Price x MP

For a price taking firm, MR = Price, so MRP and VMP are equal.

(3) (c)

For monopolist, MR > Price, so (MR x MP) / (MR x Price) and so, MRP > VMP.

(4) (b)

Marginal resource cost (MRC) is the cost of 1 additional unit of input.

NOTE: As HOMEWORKLIB Answering Policy, 1st 4 questions have been answered.