Economics 13th Edition by James Gwartney, Richard Stroup, Russell Sobel, David Macpherson

Exercise 3

Are the following statements both correct? Are they inconsistent with each other? Explain. a. "Firms will hire a resource only if they can make money by doing so." b. "In a market economy, each resource will tend to be paid according to its marginal product. Highly productive resources will command high prices, whereas less productive resources will command lower prices."