Suppose That Capital Costs $10 Per Unit and Labour Costs

question 23

Multiple Choice

Suppose that capital costs $10 per unit and labour costs $4 per unit.If the marginal product of capital is 50 and the marginal product of labour is 50,the firm should in order to minimize its costs of producing its output.

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

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Definitions:

Pavlov

Russian physiologist known for his work in classical conditioning, particularly involving the salivary response of dogs.

Sometimes-Opponent-Process Theory

A theory suggesting that emotional and behavioral reactions adjust to opposite states from those initially induced by a stimulus over time.

Conditioned Stimulus

An initially neutral stimulus that, after being linked with an unconditioned stimulus, starts to produce a conditioned response.

Conditioned Response

A conditioned response is an automatic reaction established by learning to an initially neutral stimulus after being repeatedly paired with an unconditioned stimulus that triggers an automatic response.