If a Firm Is Using Labour and Capital Such That

question 28

Multiple Choice

If a firm is using labour and capital such that the MP of labour is two times the MP of capital,and the price of labour is four times the price of capital,the firm should ________ in order to minimize its costs of producing its output.

• A)increase capital and decrease labour
• B)decrease both capital and labour
• C)decrease capital and increase labour
• D)increase both labour and capital
• E)not alter its present factor mix

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Definitions:

Upper Mantle

The portion of the Earth's mantle that lies beneath the lithosphere, involved in tectonic processes and convection currents.

Lower Mantle

The lower mantle is the region of the Earth's interior between the core-mantle boundary and the upper mantle, characterized by high temperatures and pressures, composed mostly of silicate minerals.

Outer Core

The molten outer part of Earth’s core, extending from a depth of 2,900 km to 5,100 km.

Inner Core

The solid central part of Earth’s core, extending from a depth of about 5,100 kilometers to the center of Earth (6,371 kilometers); its radius is about one-third of the whole core.