At a Given Output Level, If the Cost of Capital

question 80

Multiple Choice

At a given output level, if the cost of capital is $40 per hour, the wage paid to employees is $40 per hour, the marginal product of capital is 120 units per hour, and the marginal product of labor is 120 units per hour, the firm is_______ _ .

• A)on a short- run average total cost curve, but not the long- run average cost curve
• B)on the long- run average total cost curve, but not a short- run average cost curve
• C)on neither a short- run average total cost curve nor the long- run average cost curve
• D)on both a short- run average total cost curve and the long- run average cost curve

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Definitions:

Fundamental Duty

A basic or essential obligation that is imposed on an individual or entity by law, morality, or contract.

Bailments

A legal relationship where personal property is transferred from one party to another under agreement that the property will be returned or otherwise dealt with according to the owner's directions.

Express

Directly stated, explicit, or clearly defined.

Implied

Not explicitly stated but understood from the circumstances or context of an agreement or action.