Answer the Question on the Basis of the Following Information

question 105

Multiple Choice

Answer the question on the basis of the following information: Suppose a firm hires both labor (L) and capital (C) under purely competitive conditions.The price of labor is P_L and that of capital is P_C.The marginal product of labor is MP_L and that of capital is MP_C.The firm sells its product competitively at a price of P_X. Refer to the given information.If MP_C/P_C > MP_L/P_L,the firm:

• A) may be maximizing profits,but it is not minimizing costs.
• B) may be minimizing costs,but it is not maximizing profits.
• C) is neither minimizing costs nor maximizing profits.
• D) is minimizing costs and maximizing profits.

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Definitions:

Decay Theory

The oldest theory of forgetting, which holds that memories, if not used, fade with time and ultimately disappear altogether.

Encoding Failure

is a failure to process and store information into memory, leading to its unavailability for later retrieval.

Interference

A cause of forgetting that occurs because information or associations stored either before or after a given memory hinder the ability to remember it.

Consideration Failure

An oversight or neglect in thoroughly thinking through or regarding all aspects and consequences of a decision or action.