If W Equals the Price of Labor and R Equals $\times$

question 61

Multiple Choice

If W equals the price of labor and R equals the price of capital, then at the optimal input combination, the marginal rate of technical substitution equals

• A) W \(\times\) R
• B) W - R
• C) W + R
• D) W - 1
• E) -W/R

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Definitions:

Shares

Ownership units in a company that represent a portion of the corporation's capital, giving the shareholder a right to a part of the profits and assets.

Foreign Exchange Risk

The risk that an entity’s financial position, financial performance, or cash flows will be affected by fluctuations in exchange rates.

Recognised Assets

Assets that have been formally acknowledged and recorded on the balance sheet due to their probable future economic benefits.

Unrecognised Firm Commitments

Obligations or agreements that a company has committed to, but are not yet recorded on the balance sheet because they do not meet the recognition criteria.