If the Marginal Product of Labor Is 45 Units of Output

question 33

Essay

If the marginal product of labor is 45 units of output and the marginal product of capital is 56 units of output while the wage rate is $20 per worker and the cost of capital is $28 per machine, are these two inputs being used in the least-cost combination and what should be done if they are not?

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Definitions:

Cognitive Learning

The acquisition of knowledge and understanding through thought, experience, and the senses.

Social Learning

Social learning is a theory that suggests people can learn new behaviors and information by observing others.

Conditioned Stimulus

A formerly neutral signal that, once paired with an unconditioned stimulus, begins to elicit a conditioned reaction.

Unconditioned Stimulus

In classical conditioning, it is a stimulus that naturally and automatically triggers a response without any prior learning.