Suppose a Firm Employs Two Inputs,X and Y,and That at Their

question 63

Multiple Choice

Suppose a firm employs two inputs,X and Y,and that at their current levels of use MP_X/P_X > MP_Y/P_Y.To minimize the cost of production,the firm should hire

• A)more input Y and less input X.
• B)more input X and less input Y.
• C)more input Y only if its price falls.
• D)more input X only if its price increases.
• E)more input X only if its price decreases.

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Definitions:

Total Debits

The sum of all debit entries in a financial account or ledger, representing expenses or assets.

Closing Process

The procedure used in accounting to close out accounts at the end of an accounting period, summarizing revenues and expenses and showing net income or loss.

Income Summary

An account to which all income statement account balances are transferred at the end of an accounting period to determine the net profit or loss.

Net Loss

The amount by which total expenses exceed total revenues for a business, indicating a financial loss.