Consider a Firm That Uses Only Labour and Capital

question 86

Multiple Choice

Consider a firm that uses only labour and capital. At the present use of labour and capital, the MP of labour is two times the MP of capital, and the price of labour is two times the price of capital. In order to minimize its costs, the firm should

• A) not alter its present factor mix.
• B) decrease capital and increase labour.
• C) increase both labour and capital.
• D) decrease both capital and labour.
• E) substitute capital for labour until their marginal products are equal.

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The ability of an individual to manage their personal activities and behaviors in an effective manner without external control.

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The ability to recognize, understand, manage, and reason with one's own emotions and the emotions of others.

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The act of guiding and directing a group towards achieving a common goal, through influence and motivation.

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