A Firm Is Operating Such That the Marginal Product of Labor

question 250

Multiple Choice

A firm is operating such that the marginal product of labor is 48 and the marginal product of capital is 12. The firm is minimizing its costs only if

• A) the wage is one fourth the rental rate.
• B) the rental rate is one fourth the wage.
• C) since capital is more productive than labor, the firm must be minimizing cost.
• D) Given this information the firm can't be minimizing cost under any circumstances.

---

Definitions:

Tax

A mandatory monetary fee or different kind of charge levied on a taxpayer by a government entity to support government expenditures and various public costs.

Tax Revenue

The income that is gained by governments through taxation, which is used to fund public services and government obligations.

Tax

A compulsory financial charge imposed by a government on individuals or entities to fund public expenditures, providing revenue for government functions.

Elasticities

Measures in economics that indicate how changes in one variable, such as price or income, affect a change in another variable, such as demand or supply.