Refer to the Following

question 37

Multiple Choice

Refer to the following:
The price of capital (r) is $20.

-Why wouldn't the firm choose to produce 5,000 units of output with the combination at B?

• A) At B, MRTS < 3/2.
• B) At B, MP_K / r > MP_L / w.
• C) At B, MP_L < MP_K.
• D) both a and b
• E) none of the above

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Definitions:

Contractual Relation

A legally binding agreement between two or more parties that outlines the rights and duties of each party.

Tacit Agreement

An understanding or agreement that is implied from actions or circumstances, not explicitly stated.

Implied Warranty

An unwritten and unspoken guarantee that a product will meet a minimum level of quality and reliability.

Negligent

Failing to take proper care in doing something, often leading to harm or damage.