AAEC 3304 test (T/F) 1 PSC

When a limited amount of an input is available it ay not be possible to reach the profit maximizing point where marginal revenue is equal to marginal cost in this situation, a manager must determine the appropriate allocation of the limited input among multiple alternatives

True

Marginal revenue is the additional revenue received by a producer attributed to the sale of one more additional unit of input. Marginal revenue is calculated as the change in total revenue divided by the change in total physical product

False

Marginal value product and marginal input cost should always be used together when evaluation profit maximizing input levels because they are both computed per unit of output.

False

The economic decision rule for finding the profit maximizing amount of input to use its to find the point where marginal revenue is equal to marginal cost. Alternatively, if a point where the two are equal cannot be reached, the profit maximizing point is where marginal revenue is as close as possible to marginal cost, without marginal cost exceeding marginal revenue.

False

The economic decision rule for finding the profit maximizing amount of output to produce is the find the point where marginal revenue is equal to marginal cost. Alternatively, if a point where two are equal cannot be reached, the profit maximizing point is where marginal revenue is as close as possible to marginal cost without marginal revenue exceeding marginal cost.

False

Marginal cost is the additional cost paid by a producer attributed to the use of one more additional unit of input. Marginal cost is calculated as the change in total cost divided by the change in input.

false

A limited input should be allocated among alternative uses in such a way that the marginal value produces of the last unit used on each alternative are equal.

true