If MPK = R, the Firm

question 1

Multiple Choice

If MPK = r, the firm:

• A) should hire more labor
• B) should hire more capital until MPK= w
• C) should hire more capital until MPK = 0
• D) should get rid of some capital until MPK = r
• E) has the optimal amount of capital

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Definitions:

English Parliament

The supreme legislative body in the United Kingdom, made up of the House of Commons, the House of Lords, and the Sovereign.

Act for the Prevention of Frauds and Perjuries

Historical legislation which aimed at reducing fraud and perjury in legal agreements, emphasizing the importance of written contracts.

Promissory Estoppel

The legal enforcement of an otherwise unenforceable contract due to a party’s detrimental reliance on the contract.

Negligent Misrepresentation

A false statement of material fact made by a party who thinks it is true but who would have known the truth about the fact had he or she used reasonable care to discover or reveal it.