If the Product Derived from the Last Dollar Spent on Labor

question 187

Multiple Choice

If the product derived from the last dollar spent on labor is less than the product derived from the last dollar spent on capital, then the firm

• A) is minimizing costs.
• B) should use more labor and less capital to minimize costs.
• C) should use less labor and more capital to minimize costs.
• D) should increase the price paid to labor and decrease the price paid to capital to minimize costs.

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Definitions:

Fructus Industrials

Crops that are planted and harvested by human labor, such as wheat or corn.

Trade Fixture

Personal property that a tenant installs on leased premises for business purposes, which can be removed at the lease's termination.

Constructive Eviction

An eviction that occurs by the act of the landlord depriving the tenant of something of a substantial nature that was called for under the lease.