Assume a Firm Produces 500 Units of a Good by Using

question 37

Multiple Choice

Assume a firm produces 500 units of a good by using two inputs,capital and labor,whose per unit prices are $10 and $4.Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10.Is this firm minimizing its costs of producing 500 units of output?

• A)No, because the marginal products of the two inputs are not equal.
• B)No, because the MRTS and the price ratio for the two inputs are not equal.
• C)No, because the prices of the two inputs are not equal.
• D)The answer cannot be determined without more information.

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Definitions:

Hearing Voices

The experience of hearing sounds, often in the form of voices, in the absence of external stimuli, commonly associated with conditions such as schizophrenia or during extreme stress.

Acute Schizophrenia

A term sometimes used to describe the sudden onset of schizophrenia symptoms, such as delusions and hallucinations, which require immediate medical attention.

Positive Symptoms

In psychiatry, manifestations like hallucinations or delusions that are added to a person's behavior.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance, typically developing as a symptom of schizophrenia.