A firm is operating such that the marginal product of labor is 10 and the marginal product of capital is 20. The firm is minimizing its costs only if
A. the rental rate is half the wage.
B. the wage is half the rental rate.
C. since capital is more productive than labor, the firm must be minimizing cost.
D. Given this information the firm can't be minimizing cost under any circumstances.
Answer: B
You might also like to view...
Refer to the figure above. If this country is labor abundant, then according to the HO theory good X should be ________ intensive
A) capital B) labor C) both capital and labor D) Can't tell without more information
Expenditures on education equal about _____ of state and local government financial outlays
a. one quarter b. one third c. one half d. two thirds
Consumers will switch to another good when ______ drops too low.
a. consumer choice b. the economy c. marginal utility d. total utility
A country facing a balance of payments deficit will change the pegged value of its currency; this is called a revaluation.
Answer the following statement true (T) or false (F)