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:

Atomic Orbital

A mathematical function that describes the wave-like behavior of an electron in an atom, indicating the probability of the electron’s presence at a particular location.

Photon

A particle of electromagnetic radiation; one quantum of radiant energy.

Light Energy

The form of energy visible to the human eye that is emitted by the sun and other sources, crucial for photosynthesis in plants.

Electromagnetic Spectrum

The entire span of electromagnetic radiation, extending from gamma rays to radio waves.