If the Marginal Physical Product (MPP) of the Last Dollar

question 103

Multiple Choice

If the marginal physical product (MPP) of the last dollar spent on labor is only half as large as the MPP from the last dollar spent on capital, this firm should

• A) increase its use of labor and sell employ less capital.
• B) employ more capital.
• C) increase its use of both labor and capital.
• D) maintain its current factor utilization pattern.

---

Definitions:

Letter Code

A Letter Code is a system of symbols or characters used to represent specific information, often used for confidentiality, identification, or simplification purposes.

Insurance Policy

A contract between an individual or entity and an insurance company to provide financial protection or reimbursement against losses.

Journal Entries

Records of financial transactions in the accounting system that are used to transfer amounts from one account to another, reflecting the financial effects of business transactions.

Accident Insurance

Accident Insurance is a type of policy providing financial compensation to the insured in case of injuries, disability, or death caused solely by accidental means.