If a Firm Uses Two Factors, Labor (L) and Capital

question 168

Multiple Choice

If a firm uses two factors, labor (L) and capital (K) , and MPL/PL > MPK/PK, the firm should use more _______ and _______ .

• A) capital; less labor
• B) labor; less capital
• C) labor; more capital
• D) capital; more labor

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Definitions:

Values

Fundamental beliefs or principles that guide behavior and decision-making, reflecting what is important to an individual or organization.

Interests

Personal or professional areas of attention or concern that motivate individuals to engage in specific activities.

Behavior

The actions or reactions of an individual or system in response to external or internal stimuli.

Culture

The set of shared attitudes, values, goals, and practices that characterizes an institution, organization, or group.