Consider a Firm That Uses Only Labour and Capital

question 69

Multiple Choice

Consider a firm that uses only labour and capital.At the present use of labour and capital,the MP of labour is twice the MP of capital,and the price of labour is four times the price of capital.In order to minimize its costs,the firm should

• A)increase capital and decrease labour.
• B)decrease both capital and labour.
• C)decrease capital and increase labour.
• D)increase both labour and capital.
• E)maintain its present factor mix.

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Definitions:

Necessary

Essential; required for a specific purpose or to achieve a particular result.

Gestalt

A psychotherapeutic approach that emphasizes personal responsibility and focuses on the individual's experience in the present moment.

End-goals

Objectives or outcomes that are the ultimate targets of a process, plan, or project, serving as the final point towards which efforts are directed.

Maya

In the context of history and anthropology, it refers to an ancient Mesoamerican civilization known for its advanced writing, architecture, and mathematical and astronomical systems.