Assume there are 2 factors (labor and capital) in a company.  Their MPP to price ratios look like this:   MPP (Labor) is 35                MPP (Capital) is 80 ————————-   

Give an example of the Income Effect (tell me a story).

Solve for MFC at A, B, and C. Use this formula:  MFC = change in TC / change in Quantity of Factor X Qty of Factor X Price of Factor X Total Cost Marginal Factor Cost (in $) 0 $4 $0 N/A 2 $4 $8 A 4 $4 $16 B 6 $4 $24 C

Why is the Market Supply of Labor curve upward sloping?  This question is related to the 2 previous questions.  

Go to the previous question.  Look at the column that says Qty of Factor X.  At 4, what is the interpretation of its MRP?

Solve for the MRP at A, B, and C. Use this formula:  MRP = change in TR / change in Quantity of Factor X Qty of Factor X Qty of Output, Q Product Price Total Revenue (P x Q) Marginal Revenue Product (in $) 0 0 $4 $0 N/A 2 2 $4 $8 A 4 10 $4 $40 B 6 20 $4 $80 C

Give an example of the Marginal Productivity Theory (tell me a story). 

Go to the previous question.  Look at the column that says Qty of Factor X.  At 4, what is the interpretation of its MRP?

Explain the Purchasing Power Parity (PPP) Theory. Give me the entire story.

What is the advantage of a flexible exchange rate?