Suppose That MP_L = 50 and MP_K = 30

question 57

Multiple Choice

Suppose that MP_L = 50 and MP_K = 30.If W = 25 and R = 10,then a firm

• A) Is producing its output at the lowest possible cost
• B) Could reduce costs by employing more labour and less capital
• C) Could reduce costs by employing more capital and less labour
• D) Could minimize costs by employing more of both inputs

---

Definitions:

Unrecognized Prior Service Cost

Costs not immediately recognized on the income statement related to retroactive benefits granted to employees in a pension plan amendment.

Straight-Line Method

A depreciation method that allocates an equal amount of depreciation each year over the useful life of the asset.

Defined Benefit Pension Plan

A type of pension plan where an employer commits to pay a specified pension amount to the retiree, based on factors like salary history and duration of employment.

Pension Expense

The company's cost in a specific period for providing pension benefits to employees during that period.