The MRTS Is Currently -2

question 51

Multiple Choice

The MRTS is currently -2.The wage rate is $15 per hour and the rental rate is $30 per hour.It follows that

• A) the marginal product of capital is twice that of labor.
• B) the marginal product of labor is twice that of capital.
• C) the marginal product of capital is equal to that of labor.
• D) no statement about marginal productivity can be made without more information.

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Definitions:

Fixed Asset

Long-term tangible property held for business use and not expected to be converted into cash in the current or upcoming fiscal year.

Normal Operations

Refers to the regular and routine activities of a business under usual conditions.

Long Lived

Assets or properties owned by a company that are expected to provide economic benefits or value over an extended period, often exceeding one year.

Tangible

Relating to or representing things that have physical form and substance; can be touched or felt.