If the Marginal Rate of Technical Substitution of Labor for Capital

question 10

Multiple Choice

If the marginal rate of technical substitution of labor for capital is 6,the price of labor is $18,and the price of capital is $9,then the firm

• A)can substitute one unit of capital for six units of labor and keep output unchanged.
• B)should use more labor and less capital.
• C)should use more capital and less labor.
• D)both a and b
• E)both a and c

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Definitions:

Flexibility

The quality of being able to change or be changed easily according to the situation, often in response to different problems or conditions.

Adaptability

The quality of being able to adjust to new conditions or environments, and the capacity to deal with various changes.

Added Value Negotiating (AVN)

A negotiation strategy that focuses on increasing the overall value of the deal for all parties involved, instead of merely haggling over existing value or resources.

Nadler-Tushman Model

An organizational diagnosis model that focuses on understanding how changes in one part of the organization affect other parts, featuring input, process, and output components.