If the Marginal Physical Product (MPP) of the Last Dollar

question 103

Multiple Choice

If the marginal physical product (MPP) of the last dollar spent on labor is only half as large as the MPP from the last dollar spent on capital, this firm should

• A) increase its use of labor and sell employ less capital.
• B) employ more capital.
• C) increase its use of both labor and capital.
• D) maintain its current factor utilization pattern.

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Definitions:

Graduates

Individuals who have completed the requirements of their course of study at an educational institution.

Written Application

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The initial meeting between a job applicant and an employer, often used to assess the candidate's suitability for a position.

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The likelihood of the occurrence of an event, measured on a scale from 0 to 1, where 0 indicates impossibility and 1 indicates certainty.