Suppose a Firm Employs Two Kinds of Inputs, Capital at $100

question 74

Multiple Choice

Suppose a firm employs two kinds of inputs, capital at $100 per unit, and labour at $25 per unit. If the marginal product of capital is 50, then the firm should in order to minimize its production costs.

• A) not change its current factor use
• B) employ more labour and more capital
• C) employ more labour and less capital
• D) employ more capital and less labour
• E) There is insufficient information to make a recommendation.

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Definitions:

Necessary Conditions

Conditions that must be present for a certain event or outcome to occur, without which the event cannot take place.

Hackman's Authority Matrix Model

A framework that categorizes levels of authority in teams and organizations with respect to decision-making processes, highlighting different ways teams can be structured and empowered.

Level of Autonomy

Refers to the degree of self-governing ability or independence an individual or entity possesses.

Team Learning

The process through which a group improves its collective understanding and capabilities through shared experiences, discussions, and reflections.