If the Marginal Physical Product (MPP) of Labor Is 60

question 58

Multiple Choice

If the marginal physical product (MPP) of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use

• A) more labor and less machinery.
• B) more machinery and less labor.
• C) more labor with the same amount of machinery.
• D) the current combination.

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Definitions:

Gratuitous Agent

A person who acts on behalf of another without expecting or receiving payment, typically in a legal or business context.

Gratuitous Agent

An agent who acts on behalf of another without receiving any form of compensation or benefit for their services.

Duty of Loyalty

A legal obligation of fiduciaries to act in the best interest of the party they owe the duty to, avoiding conflicts of interest and self-dealing.

Perform as Promised

Fulfilling the obligations or conditions as outlined in a contract or agreement.