If the Marginal Physical Product of More Labor Is Twice

question 203

Multiple Choice

If the marginal physical product of more labor is twice as high as the marginal physical product of more machinery, a rational firm should

• A)reduce the labor used and increase the machinery used if labor costs half as much as machinery.
• B)reduce the labor used and increase the machinery used if labor and machinery cost the same amount.
• C)reduce the labor used and increase the machinery used only if labor costs more than twice as much as machinery.
• D)reduce the labor used and increase the machinery used only if labor costs exactly twice as much as machinery.

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Definitions:

Comparative Reasoning

Evaluating two or more objects, ideas, or situations to identify similarities and differences.

Comparative Inferences

The process of drawing conclusions based on comparisons between different sets of data or situations.

Productivity Criterion

A measure or standard used to evaluate the efficiency and effectiveness of a task or process.

Comparative Reasoning

A logical process that involves comparing similarities and differences among entities or scenarios to form a conclusion or determination.