Suppose That MP_L = 50 and MP_K = 30

question 38

Multiple Choice

Suppose that MP_L = 50 and MP_K = 30.If W = 25 and R = 10,then a firm:

• A) is producing its output at the lowest possible cost.
• B) could reduce costs by employing more labor and less capital.
• C) could reduce costs by employing more capital and less labor.
• D) could minimize costs by employing more of both inputs.

---

Definitions:

Balance Of Payments Surpluses

A situation where the total amount of money coming into a country from abroad exceeds the total amount of money leaving the country.

Account Surpluses

Refers to the positive balance of the funds in an account, or situations where revenues exceed the expenditures in fiscal accounts.

Trade Deficit

A situation where a country imports more goods and services than it exports.

Exchange Rate

The price of one currency in terms of another for conversion purposes.