Producer Is Hiring 20 Units of Labor and 6 Units

question 38

Multiple Choice

producer is hiring 20 units of labor and 6 units of capital (bundle A) .The price of labor is $10,the price of capital is $2,and at A,the marginal products of labor and capital are both equal to 20.In equilibrium,

• A)MP_L will be less than 20.
• B)MP_K will be more than 20.
• C)MP_L will be 5 times MP_K.
• D)a and b
• E)none of the above

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