Suppose a Firm Employs Two Kinds of Inputs,capital at $100

question 54

Multiple Choice

Suppose a firm employs two kinds of inputs,capital at $100 per unit,and labour at $25 per unit.If the marginal product of capital is 50,then the firm should in order to minimize its production costs.

• A)employ more labour and more capital
• B)employ more capital and less labour
• C)employ more labour and less capital
• D)not change its current factor use
• E)There is insufficient information to make a recommendation.

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Definitions:

Self-Dealing

Any instance in which directors or officers make decisions that violate their corporate duty of loyalty.

Duty of Loyalty

An agent’s obligation to act in the interest of the principal.

Fifth Amendment

An amendment to the US Constitution that provides several rights to individuals, including protection against self-incrimination and double jeopardy.

Defective Corporation

A corporation about which an error or omission was made during its incorporation process.