When a Cost- Minimizing Firm Is Faced with an Increase

question 12

Multiple Choice

When a cost- minimizing firm is faced with an increase in the relative price of labour,it adjusts its factor usage so as to

• A)increase the marginal product of labour relative to the marginal product of capital.
• B)use more labour per unit of output than before.
• C)increase the marginal product of capital relative to the marginal product of labour.
• D)maintain the previous usage of labour.
• E)use more of both capital and labour per unit of output.

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Definitions:

Personal Accountability

The willingness to take responsibility for one's own actions and their outcomes.

Loss of Individuality

The process through which individuals feel they are losing their unique identity and becoming indistinguishable from others.

Self-Awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Social Process

The pattern of growth and change in a society over time, involving the interaction between individuals and groups.