If the marginal physical product (MPP) of the last dollar spent on labor is only half as large as the MPP from the last dollar spent on capital, this firm should
A) increase its use of labor and employ less capital.
B) employ more capital.
C) increase its use of both labor and capital.
D) maintain its current factor utilization pattern.
B
You might also like to view...
Natural oligopoly is a situation where
A) the level of demand can support only a few firms. B) there is only one firm. C) there are only two firms. D) there are legal barriers to entry.
The Atlantic City Expressway is a highway that runs from outside Philadelphia to Atlantic City, New Jersey. It is notoriously congested during the summer weekends when many people are driving to the beach about the same time. The marginal private cost for a driver of driving on the Expressway includes
I. the cost of gasoline. II. the cost of increasing congestion for everyone else. A) I only B) II only C) Both I and II D) Neither I nor II
If the price of flash memory cards increases, then there will be ________ of flash memory cards
A) a decrease in the supply B) an increase in the supply C) an increase in the quantity supplied D) a decrease in the quantity supplied
The official unemployment rate disguises the extent of the unemployment problem because: a. children are not counted as unemployed
b. retired persons are not counted as unemployed. c. full-time students are not counted as unemployed. d. discouraged workers are counted as unemployed. e. people overqualified for their current job are not considered unemployed.