Assume a Firm Is Currently Employing 20 Units of Capital

question 75

Multiple Choice

Assume a firm is currently employing 20 units of capital and 100 units of labor in its production process. Assume also that the marginal product of the 20^th unit of capital is 40 units of output, the marginal product of the 100^th unit of labor is 10 units of output and the per unit prices of capital and labor are $20 and $10, respectively. In this case, in order to minimize its costs of production the firm should:

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

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Definitions:

Magnetic Fields

Invisible fields that exert force on objects that possess magnetic properties or are conducting electricity, influencing their orientation and behavior.

REM Sleep

A phase of sleep characterized by rapid eye movement, where dreaming occurs and the body undergoes a variety of changes, including increased brain activity.

Color

The attribute of visual perception described through hue, saturation, and brightness, as determined by the spectral composition of light.

Black and White

Thinking characterized by absolute terms, seeing everything as one extreme or the other with no middle ground.