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:

Family Heirloom

A valuable object that is passed down from generation to generation within a family, often carrying sentimental value.

Natural Resource Development

The process of cultivating, extracting, and managing natural resources such as minerals, oil, and timber for economic gain.

Environmental Protection

Measures and policies aimed at the preservation of natural resources and prevention of pollution to safeguard the environment for future generations.

Nuisance

An act, condition, thing, or person causing inconvenience or annoyance to others, legally actionable if it interferes with the use and enjoyment of one's property.