Assume a Firm Uses Two Inputs,capital and Labor

question 85

Multiple Choice

Assume a firm uses two inputs,capital and labor.All else constant,an increase in the price of labor would create an incentive for the firm to:

• A)substitute labor for capital in its production function.
• B)substitute capital for labor in its production function.
• C)hire more capital and labor.
• D)hire less capital while holding the amount of labor employed constant.

---

Definitions:

Coal Mine Pollution

Environmental contamination resulting from the operation of coal mines, including air and water pollution.

Marginal Social Cost

The total cost society bears for the production of an additional unit of a good, including both private costs and any external costs.

Production Process

A series of steps that involves the transformation of raw materials into finished products.

Coal Mine Pollution

Coal mine pollution involves the release of harmful substances into the environment as a result of coal mining activities, which can include air and water pollution, soil degradation, and ecological disruption.