A Profit-Maximizing Firm Will Increase Its Use of Capital and Decrease

question 107

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

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Definitions:

Global Climate

The average weather patterns that are observed over long periods, across the entire planet, encompassing a complex system influenced by solar radiation, the atmosphere, oceans, and landmasses.

Ice Ages

Periods of long-term reduction in the temperature of Earth's surface and atmosphere, resulting in the expansion of continental and polar ice sheets.

Continents

Large landmasses on Earth's surface, conventionally counted as seven: Africa, Antarctica, Asia, Australia, Europe, North America, and South America.

Oceans

Oceans are large bodies of salt water that cover approximately 71% of the Earth's surface, divided into five major basins: the Pacific, Atlantic, Indian, Southern, and Arctic Oceans.