For a Firm with Only Two Inputs, Capital and Labour

question 107

Multiple Choice

For a firm with only two inputs, capital and labour, the condition MPK/MPL = PK/PL guarantees that the firm is

• A) minimizing its costs but is not necessarily maximizing its profits.
• B) technically efficient but not economically efficient.
• C) economically efficient but not technically efficient.
• D) at its profit- maximizing output but is not necessarily minimizing its costs.
• E) at its profit- maximizing and cost- minimizing level of output.

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Definitions:

Negative Reinforcers

Stimuli that, when removed after a particular behavior, increase the likelihood of that behavior being repeated in the future.

Cumulative Recorder

A device used in behavioral psychology to record the frequency of behaviors over time, creating a graphical representation.

Graphic Record

A visual representation of data or information, usually in the form of charts, graphs, or diagrams.

Reinforcement Contingencies

Conditions that determine when reinforcement will be given for a particular behavior, crucial in the process of learning and behavior modification.