Suppose that Silvia's Dance Studio uses both labor and capital to teach dance lessons. Given her current mix of labor and capital, the cost efficiency of labor is 1 dance lesson per dollar, and the cost efficiency of capital is 5 dance lessons per dollar. Silvia should
A. Use only labor to produce the lessons.
B. Use only capital to produce the lessons.
C. Hire less labor and use more capital.
D. Use less capital and hire more labor.
Answer: C
You might also like to view...
Using the table above, the labor participation rate is
A) 67 percent. B) 48 percent. C) 75 percent. D) 83 percent. E) 40 percent.
A voucher can eliminate the deadweight loss and lead to an efficient outcome if the value of the voucher equals the ________ of the good
A) marginal external benefit B) marginal social benefit C) marginal private benefit D) marginal social cost
Refer to Scenario 17.5. Under which of the following payment schemes would workers have an incentive to exert high effort?
A) A guaranteed wage equal to $0 B) A guaranteed wage equal to $5000 C) A guaranteed wage equal to $10,000 D) A wage equal to the income earned, minus $4000 E) A wage equal to $0 if revenue is $5000, $2000 if revenue is $7000, and $8000 if revenue is $13,000
Channeling people according to sex or race into particular occupations tends to
a. lower the wage rate in these occupations. b. increase the wage rate in these occupations. c. reduce income inequality among occupations. d. affect employment opportunities, but not wage rates.