A Profit- Maximizing Firm Will Increase Its Use of Capital

question 51

Multiple Choice

A profit- maximizing firm will increase its use of capital and decrease its use of labour when the

• A)marginal product of capital is higher than the marginal product of labour.
• B)average product of capital is higher than the average product of labour.
• C)marginal product of capital,per dollar spent on capital,is greater than the marginal product of labour,per dollar spent on labour.
• D)marginal product of capital,per dollar spent on capital,is less than the marginal product of labour,per dollar spent on labour.
• E)total product of capital is higher than the total product of labour.

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Definitions:

Observer Assessments

Observer assessments involve the evaluation or judgement of a subject's behavior, skills, or attributes by someone other than the subject itself.

Dependent Variable

In research, the variable being tested and measured, which is expected to change as a result of manipulations in the independent variable.

Consumption of Alcohol

Consumption of Alcohol pertains to the intake of beverages containing ethyl alcohol, which can range from moderate drinking to heavy or binge drinking.

Continuum Model

A concept or framework suggesting that certain phenomena or variables exist along a continuous, rather than a categorical, scale.