Bev's Bakery, a Donut Maker, Has Discovered That the Ratio

question 125

Multiple Choice

Bev's Bakery, a donut maker, has discovered that the ratio of the marginal product of labor to the price of labor is 6.5, while the ratio of the marginal product of capital to the price of capital is 6.1.The firm has determined that it does not want to change its total costs.Bev's Bakery should:

• A) do nothing; the differences in the ratios of marginal product to input price are too small to matter.
• B) use more labor and less capital.
• C) use more capital and less labor.
• D) do nothing different since there is insufficient information upon which to make a decision.

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Definitions:

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A genetic disorder due to a deficiency in the enzyme needed to process the amino acid phenylalanine, requiring a strict diet to prevent intellectual disability.

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A rare inherited disorder that destroys nerve cells in the brain and spinal cord, typically evident in infants and leading to early death.

Metabolic Defects

Abnormalities or malfunctions in the biochemical pathways of the body's metabolism, leading to various diseases or disorders.

Sexual Abuse

Involves non-consensual sexual contact or behavior, often exerting power over the victim, and causing physical or psychological harm.