Suppose That Capital Costs $100 Per Unit and Labour Costs

question 105

Multiple Choice

Suppose that capital costs $100 per unit and labour costs $40 per unit.If the marginal product of capital is 200 and the marginal product of labour is 60,a cost- minimizing firm should

• A)employ more of both capital and labour.
• B)employ less of both capital and labour.
• C)not change its current factor use.
• D)employ less capital and more labour.
• E)employ more capital and less labour.

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Definitions:

Wealth

An abundance of valuable financial assets or physical possessions which can include money, properties, and other material assets.

Marital Satisfaction

A measure of the happiness and fulfillment experienced within a marriage or long-term partnership.

Random Sampling

A technique used in research to select a sample of subjects in such a way that every individual has an equal chance of being chosen.

False Generalizations

Erroneous conclusions or statements made about a whole group based on insufficient or biased information.