A Firm Uses Labor and Capital

question 169

Multiple Choice

A firm uses labor and capital. To tell if the firm is technologically efficient, you

• A) do not need to know the cost of labor or the cost of capital.
• B) need to know the cost of capital but not the cost of labor.
• C) need to know the cost of labor and the cost of capital.
• D) need to know the cost of labor but not the cost of capital.

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Definitions:

Marginal Damage

The additional harm or cost caused by producing one more unit of a good or service, often used in the context of environmental economics.

Total Damage

Total Damage refers to the cumulative harm or financial loss incurred as a result of an action or event.

Efficient Level

The point at which a system or process achieves its maximum productivity with the least wasted effort or expense.

Efficient Amount

The quantity of a good or service that achieves the optimal balance between benefits and costs, maximizing societal welfare.