Suppose a Firm Is Using 1500 Units of Labour and 20

question 75

Multiple Choice

Suppose a firm is using 1500 units of labour and 20 units of capital to produce 100 tonnes of mineral ore.The price of labour is $50 per unit and the price of capital is $800 per unit.The MP_L equals 60 and the MP_K equals 1200.In this situation,

• A)the firm is minimizing its costs.
• B)the firm should increase the use of both inputs.
• C)the firm could lower its production costs by decreasing labour input and increasing capital input.
• D)the firm could lower its production costs by increasing labour input and decreasing capital input.
• E)the firm should decrease the use of both inputs.

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Definitions:

Unique History

A specific background or series of events that is distinctive to an individual, organization, or location.

Success Secrets

Strategies or insights considered instrumental in achieving personal or professional success.

Incentives

Have two pieces: a performance evaluation metric, like sales, profit, or investment return, and a reward scheme that rewards better performance, like a bonus, the promise of a promotion, or a commission. Performance evaluation metrics can be objective or subjective.

Supplier Power

The influence suppliers have over the market or customer base, often due to lack of competition, affecting prices, quality, and availability.