If the Marginal Product of Labor Is Four Times the Marginal

question 118

Multiple Choice

If the marginal product of labor is four times the marginal product of capital and the price of labor is twice the price of capital,then:

• A)labor will be substituted for capital by a profit maximizing firm.
• B)capital will be substituted for labor by a profit maximizing firm.
• C)output cannot be expanded any further by using the same input levels.
• D)input usage should be left unchanged.

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Definitions:

Preponderance of the Evidence

The standard of proof in civil cases, where the burden of proof is met if the proposition is more likely to be true than not true.

Trespass

Unauthorized entry onto someone else's property without permission.

Justice

The principle of fairness and moral righteousness that guides the administration of law and ensures that individuals receive what they are due.

Common Law

A legal system based on custom, tradition, and court decisions, rather than written laws.