If an individual thinks about how he purchase goods and services,he will realize that he allocates his expenditures so that the pleasure he gets out of spending one more dollar is the same no matter what he spends that dollar on.For a firm purchasing resources,this is the same as ensuring that:
A)the ratio between marginal revenue product and the marginal factor cost is equal for all the resources used.
B)the marginal revenue product of the resources are equal.
C)the marginal factor cost of the resources are equal.
D)the ratio between marginal revenue product and the marginal factor cost is greater than one for all resources.
E)the marginal revenue product is greater than the marginal factor cost of all resources.

Question

Quizplus · Accepted Answer

For a firm, the optimal allocation of resources is achieved when the ratio of marginal revenue product (MRP) to marginal factor cost (MFC) is equal across all resources, similar to how an individual allocates expenditures to equalize marginal utility per dollar spent.

If an Individual Thinks About How He Purchase Goods and Services,he