Assume a firm is currently employing 20 units of capital and 100 units of labor in its production process
Assume also that the marginal product of the 20th unit of capital is 40 units of output, the marginal product of the 100th unit of labor is 10 units of output and the per unit prices of capital and labor are $20 and $10, respectively. In this case, in order to minimize its costs of production the firm should: A) hire more capital and less labor.
B) hire more labor and less capital.
C) hire less capital and less labor.
D) hire more capital and more labor.
A
You might also like to view...
In neoclassical growth theory, technological change ________
A) occurs by chance B) is influenced by population growth C) is influenced by the rate of economic growth D) occurs at a steady rate
Economic choice and competitive behavior are the result of
What will be an ideal response?
Economic analysis indicates the net long-run effect of outsourcing for the United States is likely to be
A) an increased demand for labor due to economic growth. B) a decreased in the demand for labor in the United States in the short run. C) an increase in the supply of labor. D) a decrease in the supply of labor.
Which of the following observations is true of business norms?
A. They are somewhat like a company's mission. B. They are equivalent to contract laws. C. They are standards of accepted behavior. D. They are the same as product quality standards.