A Firm Is Employing Inputs Such That the Marginal Product

question 153

Multiple Choice

A firm is employing inputs such that the marginal product of labor is 25 and the marginal product of capital is 40. The price of labor is $5, and the price of capital is $8. If the firm wants to minimize costs, then it should

• A) use more labor and less capital.
• B) use less labor and less capital.
• C) use less labor and more capital.
• D) make no change in resource use.

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Definitions:

Dreams

Sequences of images, emotions, and thoughts passing through a sleeping person's mind, often reflecting unconscious desires or processing daily experiences.

Sigmund Freud

An Austrian neurologist and father of psychoanalysis, known for his theories of the unconscious mind, mechanisms of repression, and the structure of the psyche in id, ego, and superego.

Unconscious

The part of the mind that contains thoughts, memories, and desires not within the current awareness but can influence behaviors.

Psychoanalysts

Professionals who practice psychoanalysis, a therapeutic approach developed by Sigmund Freud, focusing on examining the unconscious mind's role in human behavior.