The Following Table Shows the Marginal Products of Capital (K)and

question 141

Multiple Choice

The following table shows the marginal products of capital (K) and labour (L) for various methods for Firm ABC to produce 1000 toys per day.
TABLE 8-2
-Refer to Table 8-2.Suppose the firm is employing production method G.How should this firm adjust its use of capital and labour in order to minimize costs?

• A)employ more capital and less labour
• B)employ less capital and more labour
• C)employ more capital and labour
• D)employ less capital and labour
• E)There is insufficient information to know.

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Definitions:

Income

Earnings received by an individual or business for their labor, investments, or through the sale of goods or services.

Lorenz Curve

Data plotted to show the percentage of income enjoyed by each percentage of households, ranked according to their income.

Perfect Income Equality

A theoretical economic condition where all individuals or households earn exactly the same income, leading to absolute equity in income distribution.

Incidence Of Poverty

The proportion or frequency of individuals or families whose income falls below the poverty line, making it difficult to afford basic life necessities.