Suppose That the Production of Wheat Requires Two Inputs, Labor

question 108

Multiple Choice

Suppose that the production of wheat requires two inputs, labor and fertilizer. The price of labor is $4.50, and the price of fertilizer is $3.00. A farmer is currently employing the inputs such that the marginal product of labor is 11 and the marginal product of fertilizer is 8. If the farmer is a cost-minimizer, he should

• A) use more labor and less fertilizer.
• B) use more fertilizer and less labor.
• C) use more labor and more fertilizer.
• D) continue using the same amounts of each input.

---

Definitions:

Definition Of Security

A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Resold Without Registration

Referring to the sale of securities without registering them with the required regulatory body, often not in compliance with securities law.

Most Securities

Financial instruments that signify ownership (stocks), a debt agreement (bonds), or rights to ownership (derivatives) that investors can buy and sell.

Meaningful Cautionary Statements

Communications that provide important warnings or advisements to prevent harm or misuse of a product or service.