Suppose a Firm Uses Labour and Capital to Produce Output

question 218

Multiple Choice

Suppose a firm uses labour and capital to produce output.The last unit of labour 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 labour 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:

Battery

Intentional physical contact or harm to another person without their consent, considered a criminal offense and tort.

Assault

An intentional tort that prohibits any attempt or offer to cause harmful or offensive contact with another if it results in a well-grounded apprehension of imminent battery in the mind of the threatened person.

Threatens

Expressing or implying an intention to cause harm or negative consequences in order to influence someone's actions or decisions.

Nuisance

An act, condition, or thing that interferes with the use or enjoyment of property.