Suppose the Marginal Rate of Technical Substitution for Labour with Capital

question 20

Multiple Choice

Suppose the marginal rate of technical substitution for labour with capital is 5,the marginal product of labour is 8 and the marginal product of capital is 4.Assuming the law of diminishing marginal product applies to both labour and capital,this firm

• A) Is minimizing the cost of producing its output
• B) Could reduce costs by substituting workers with capital
• C) Could reduce costs by substituting capital with workers
• D) Could reduce the cost of producing the output by reducing workers and capital by the same proportion

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Definitions:

Chronic Diseases

Long-lasting medical conditions that are often progressive and require ongoing management and treatment.

General Adaptation Syndrome (GAS)

A conceptual framework that outlines how the body responds to stress over short and long periods, divided into three phases: alarm, resistance, and exhaustion.

Chronic Stressors

Persistent stress factors that cause long-term stress and can lead to significant health issues, including mental and physical health problems.

Immune Functioning

The complex activities performed by the immune system to protect the body against diseases and other potentially damaging foreign bodies.