Suppose for a Particular Production Function That $M P _ { L } = 36 \left( \frac { K } { L } \right) M P _ { X } = 36 \left( \frac { L } { K } \right)$

question 41

Multiple Choice

Suppose for a particular production function that $M P _ { L } = 36 \left( \frac { K } { L } \right) M P _ { X } = 36 \left( \frac { L } { K } \right)$ If the price of capital is $5 per unit and the price of labor is $125 per unit, at the cost-minimizing combination of capital and labor the firm should employ

• A) five times as much labor as capital.
• B) five times as much capital as labor.
• C) 125/36 units of capital and 5/36 units of labor.
• D) 36/125 units of capital and 36/5 units of labor.

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Definitions:

Sense of Urgency

is the feeling that one’s actions must be immediate and rapid to accomplish goals or respond to situations.

Annual Growth Rate

The percentage increase in the value of something over a one-year period, often used to measure the expansion of a company or economy.

Expansive Industry

An industry experiencing growth and enlargement, encompassing a wide range of activities and services.

Niche Market

A specific, often small segment of the market with unique preferences and needs that may be underserved.