Suppose That Silvia's Dance Studio Uses Both Labor and Capital

question 82

Multiple Choice

Suppose that Silvia's Dance Studio uses both labor and capital to teach dance lessons.Given her current mix of labor and capital,the cost efficiency of labor is 1 dance lesson per dollar,and the cost efficiency of capital is 5 dance lessons per dollar.Silvia should

• A)Hire less labor and use more capital.
• B)Use only capital to produce the lessons.
• C)Use less capital and hire more labor.

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