Assume a Firm Produces 500 Units of a Good by Using

question 15

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.To minimize costs this firm should employ:

• A)the existing combination of resources.
• B)more labor and less capital.
• C)more capital and less labor.
• D)both more labor and more capital.