Suppose a Firm Is Using 1500 Units of Labour and 20

question 9

Multiple Choice

Suppose a firm is using 1500 units of labour and 20 units of capital to produce 100 tonnes of mineral ore.The price of labour is $40 per unit and the price of capital is $1000 per unit.The MPL equals 25 and the MPK equals 750.In this situation,

• A)the firm is minimizing its costs.
• B)the firm should increase the use of both inputs.
• C)the firm could lower its production costs by decreasing labour input and increasing capital input.
• D)the firm could lower its production costs by increasing labour input and decreasing capital input.
• E)the firm should decrease the use of both inputs.

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Definitions:

Blepharoptosis

The drooping or falling of the upper eyelid, which can be due to various causes including muscle weakness, nerve damage, or congenital conditions.

Eyelids

Foldable covers that protect the eye, consisting of an upper and a lower flap, and capable of blinking.

Drooping

Sagging or hanging down loosely, often used to describe parts of the body, plants, or objects.

Iris

The colored part of the eye surrounding the pupil, controlling light levels entering the eye by adjusting the pupil size.