If the MPK/PK Is Greater Than the MPL/PL,which of the Following

question 128

Multiple Choice

If the MPK/PK is greater than the MPL/PL,which of the following is correct?

• A)The firm should substitute labour for capital.
• B)The firm should substitute capital for labour.
• C)The firm should raise the wage rate of its labour.
• D)The firm should decrease its output.

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Definitions:

Nomothetic Insights

Generalizations or laws that apply to large numbers of individuals, often used in the context of psychology to identify universal traits or behaviors.

Statistical Tests

Procedures in statistics used to determine whether hypotheses about data sets can be supported or not.

External Validity

The extent to which the results of a study can be generalized to other situations and to other people outside of the experimental setting.

Observer Bias

A form of research bias that occurs when an observer's expectations or preconceptions affect their interpretation of the subjects' behaviours or outcomes.