A producer is hiring 20 units of labor and 6 units of capital (bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. In equilibrium,
A. MPL will be less than 20.
B. MPL will be 5 times MPK.
C. MPK will be more than 20.
D. a and b
E. none of the above
Answer: B
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As a result of the relatively low female-to-male wage ratio in early-1800s New England,
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