Answer the following statements true (T) or false (F)
1) To minimize costs, in the short-run, managers need to focus on minimizing the cost of the fixed inputs.
2) If the cost of capital is $100 per hour, the wage paid to employees is $20 per hour, the marginal product of capital is 10 units per hour; and the marginal product of labor is 2 units per hour, the firm is minimizing costs.
3) If the cost of capital is $100 per hour, the wage paid to employees is $20 per hour, the marginal product of capital is 10 units per hour; and the marginal product of labor is 5 units per hour, the firm is minimizing costs.
4) If the cost of capital is $100 per hour, the wage paid to employees is $20 per hour, the marginal product of capital is 10 units per hour; and the marginal product of labor is 4 units per hour, to minimize its costs, the firm should increase the total amount of labor used and decrease the amount of capital used.
5) If the cost of capital is $80 per hour, the wage paid to employees is $15 per hour, the marginal product of capital is 24 units per hour; and the marginal product of labor is 3 units per hour, to minimize its costs, the firm should increase the total amount of labor used and decrease the amount of capital used.
1) FALSE
2) TRUE
3) FALSE
4) TRUE
5) FALSE
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