A Firm Is Operating Such That the Marginal Product of Labor

question 193

Multiple Choice

A firm is operating such that the marginal product of labor is 10 and the marginal product of capital is 20. The firm is minimizing its costs only if

• A) the wage is half the rental rate.
• B) the rental rate is half 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.

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Definitions:

Labor Dispute

A conflict between employers and employees or between employees themselves, typically over issues like wages, working conditions, and union representation.

Impartial

Not biased or partial; fair and just, treating all rivals or disputants equally.

Arbitrator

An independent third party chosen to settle a dispute without involving the courts.

Union

An organization of workers formed to protect and advance their rights and interests.