Consider an economy where the only consumption good is ice cream. Firms in this economy must:
A) hire all workers and rent all machines available.
B) choose how many workers to hire and how many ice cream machines to rent.
C) choose how many workers to hire and rent all machines available.
D) hire all workers and choose how many machines to rent.
E) None of these answers is correct.

Question

Quizplus · Accepted Answer

Since the economy only produces ice cream, firms must choose how many workers to hire and how many ice cream machines to rent in order to produce the desired amount of ice cream. This choice allows firms to determine their optimal level of production while taking into account the costs associated with both labor and capital.

Consider an Economy Where the Only Consumption Good Is Ice