Suppose a Firm Is Using 1500 Units of Labour and 20

question 49

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 $50 per unit and the price of capital is $800 per unit.The MPL equals 25 and the MPK equals 400.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:

Deceiving

The act of misleading or tricking someone into believing something that is not true.

Unduly Influences

Describes a situation where an individual is manipulated or pressured into making a decision or signing a document, not of their own free will.

Voidable

A legal term describing a transaction or agreement that may be annulled or invalidated by one of the parties involved due to certain defects.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the party to be charged, to be enforceable.