Answer the Question on the Basis of the Following Marginal

question 21

Multiple Choice

Answer the question on the basis of the following marginal product data for resources a and b.The output of these independent resources sells in a purely competitive market at $1 per unit. $\begin{array}{ccc}\begin{array}{ccc}\text { Inputs } \\\text { of a } & & \mathrm{MP}_{\mathrm{a}} \\\hline1 & & 25 \\2 & & 20 \\3 & & 15 \\4 & & 10 \\5 & & 5 \\6 & & 2 \\7 & & 1\end{array}\begin{array}{c}\begin{array}{c}\text { Inputs } \\\text { of } b\end{array} & & M P_{b} \\\hline1 & & 40 \\2 & & 36 \\3 & & 32 \\4 & & 24 \\5 & & 20 \\6 & & 16 \\7 & & 8\end{array}\end{array}$ Refer to the given data.Assume now that the prices of a and b are $15 and $20 respectively.To maximize profits,what combination of a and b should the employer hire?

• A) 3 of a and 5 of b.
• B) 5 of a and 7 of b.
• C) 7 of a and 7 of b.
• D) 6 of a and 2 of b.

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Definitions:

Market Breadth

An indicator used to gauge the overall direction of the stock market by analyzing the number of companies advancing versus those declining.

Advancing Stocks

Shares that have increased in price during a specific trading session, indicating positive market sentiment.

Declining Stocks

Stocks whose price has decreased over a specific period.

Market Breadth

A measurement of how many stocks are participating in the movement of a market or index, indicating the overall health and direction of the market.