A Firm Is Currently Hiring Capital and Labor So That

question 170

Multiple Choice

A firm is currently hiring capital and labor so that MP_L/P_L < MP_K/P_K. If the firm wishes to maximize profits it should hire

• A) less labor and less capital.
• B) more capital and more labor.
• C) more labor and less capital.
• D) less labor and more capital.

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Definitions:

GDP

Gross Domestic Product, a measure of the economic performance of a country, representing the total value of all goods and services produced over a specific time period.

Government Deficits

A financial situation that occurs when a government's expenditures exceed its revenues, leading to borrowing or the use of saved funds.

Standard Of Living

The amount of affluence, convenience, physical assets, and essential services available to a particular economic group or region.

Specialized Labor

Workforce that has a high level of expertise, training, or education in specific fields or occupations, enabling them to perform tasks more efficiently.