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

Economics

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Economics