Which of the Following Sets of Economic Data Is Minimizing

question 97

Multiple Choice

Which of the following sets of economic data is minimizing the cost of producing a given level of output?

• A) MP_L = 20, MP_K = 40, w = $16, r = $32.
• B) MP_L = 20, MP_K = 40, w = $32, r = $16.
• C) MP_L = 40, MP_K = 20, w = $16, r = $32.
• D) MP_L = 40, MP_K = 40, w = $16, r = $32.

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Definitions:

Income

The remuneration accrued, notably in a recurrent manner, from labor or the investment of resources.

Substitution Effect

The economic principle that as prices rise or income decreases, consumers will replace more expensive items with less costly alternatives.

Income

The monetary amount received by an individual or entity in exchange for labor, services, or investment.

Price

The amount of money or compensation exchanged for the ownership or use of a good or service.