The Following Table Shows the Marginal Products of Capital (K)and

question 126

Multiple Choice

The following table shows the marginal products of capital (K) and labour (L) for various methods for Firm ABC to produce 1000 toys per day. $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Production } \\\text { Method }\end{array} & \text { MPK } _ { K } & \text { MP}_{L } \\\hline \text { A } & 50 & 4 \\\hline \text { B } & 45 & 8 \\\hline \text { C } & 40 & 12 \\\hline \text { D } & 35 & 16 \\\hline \text { E } & 30 & 20 \\\hline \text { F } & 25 & 24 \\\hline \text { G } & 20 & 28 \\\hline\end{array}$$ TABLE 8- 2
-Refer to Table 8- 2.As this firm switches from production method A to production method G,production is

• A)becoming more profitable.
• B)remaining at a cost- minimizing level of output.
• C)moving farther and farther away from cost minimization.
• D)becoming more labour intensive and less capital intensive.
• E)becoming more capital intensive and less labour intensive.

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Definitions:

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