A Firm Is Operating Such That the Marginal Product of Labor

question 250

Multiple Choice

A firm is operating such that the marginal product of labor is 48 and the marginal product of capital is 12. The firm is minimizing its costs only if

• A) the wage is one fourth the rental rate.
• B) the rental rate is one fourth the wage.
• 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.

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Definitions:

Assignee

A party or person who receives rights or interests from another, referred to as the assignor.

Delegator

An individual or entity that assigns responsibility or authority to another party to carry out specific activities or tasks.

Tenants

Tenants are individuals or entities that occupy land or property rented from a landlord under a lease agreement.

Landlords

Property owners who lease their real estate to tenants for a specified time in exchange for regular payments, typically bound by local real estate laws.