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

question 32

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.Suppose the firm is employing production method G.How should this firm adjust its use of capital and labour in order to minimize costs?

• A)employ less capital and more labour
• B)employ more capital and labour
• C)employ less capital and labour
• D)employ more capital and less labour
• E)There is insufficient information to know.

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