Suppose a Firm Uses Labor and Capital to Produce Output

question 116

Multiple Choice

Suppose a firm uses labor and capital to produce output.The last unit of labor hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units.Use the optimal combination of inputs rule to calculate the price of capital if the price of labor is $6 per unit.The price of capital is

• A)$2.
• B)$10.
• C)$20.
• D)impossible to determine with the information given.

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Definitions:

Breeders

Individuals within a population that are of reproductive age and actively participate in mating and producing offspring.

Direct Benefits

Benefits that directly improve the fitness of an individual receiving them, often in the context of mate choice, including improved nutrition, protection, or resources.

Seychelles Warblers

A small bird species native to the Seychelles islands, known for its cooperative breeding behaviors.

Conservation Efforts

Actions taken to protect, preserve, or restore wildlife and natural habitats to prevent biodiversity loss and species extinction.