A Cost-Minimizing Firm Using Two Inputs, X and Y, Will

question 116

Multiple Choice

A cost-minimizing firm using two inputs, x and y, will employ inputs so that

• A)MP x = MP y.
• B)Pₓ / MP y = Pᵧ / MP x.
• C)MP x/ Pₓ = MP y / Pᵧ .
• D)Pₓ = Pᵧ .

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Definitions:

Exchange

The act of trading goods, services, or currencies between two or more parties.

Trading Partners

Countries, entities, or individuals that exchange goods, services, or resources among each other.

Law of Comparative Advantage

The principle that a country should specialize in producing and exporting goods in which it has the lowest opportunity cost and import goods in which it has a comparative disadvantage.

Specialization

The process of focusing on a limited range of goods or services to gain efficiency or expertise.