If the MPP of Labor Is 60 and the Price

question 41

Multiple Choice

If the MPP of labor is 60 and the price of labor per period is $20, the MPP of machinery is 75 and the price of the machinery per period is $25, in order to achieve optimal input proportions the firm should use

• A) more labor and less machinery.
• B) more machinery and less labor.
• C) more labor with the same amount of machinery.
• D) the current combination.

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Definitions:

Exertion of Power

The act of applying or enforcing one's authority or influence over others.

Labour Union

An organized association of workers formed to protect and further their rights and interests.

Proportional Representation

An electoral system in which the number of seats held by a political party in the legislature is proportionate to the number of votes received by that party in an election.

Political Economy

The interactions of politics, government and governing, and the social and cultural constitution of markets, institutions, and actors.