A Change in the Relative Price of an Input in the Cost

question 77

Multiple Choice

A change in the relative price of an input in the cost minimization problem:

• A)leads to an increase in the use of the cheaper input.
• B)leads to less output being produced.
• C)leads to more output being produced.
• D)leads to higher profits.

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Definitions:

Gross Negligence

An extreme lack of care or failure to act that demonstrates a disregard for the safety or rights of others, potentially leading to legal liability.

Bailment

The transfer of a chattel by the owner to another for some purpose, with the chattel to be later returned or dealt with in accordance with the owner’s instructions.

Reasonable Care

The standard of care that a reasonably prudent person would observe under a given set of circumstances.

Bailee for Reward

A bailee for reward refers to an individual or entity that has temporary possession of someone else’s property in exchange for payment, bound to take care of the property.