If the Marginal Product of Labor Is 45 Units of Output

question 33

Essay

If the marginal product of labor is 45 units of output and the marginal product of capital is 56 units of output while the wage rate is $20 per worker and the cost of capital is $28 per machine, are these two inputs being used in the least-cost combination and what should be done if they are not?

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Definitions:

Habitual Behavior

Regular patterns of action that are repeated frequently and often performed subconsciously.

Conscious Decisions

Choices made with full awareness and deliberation, involving thoughtful consideration and an understanding of the consequences.

Heredity

The genetic transmission of characteristics from parents to offspring.

Moral Conduct

The behavior of an individual that is in alignment with moral or ethical principles, governing the distinction between right and wrong actions.