A Producer Is Hiring 20 Units of Labor and 6

question 3

Multiple Choice

A producer is hiring 20 units of labor and 6 units of capital bundle A) .The price of labor is $10,the price of capital is $2,and at A,the marginal products of labor and capital are both equal to 20.Beginning at A,if the producer increases labor by one unit and decreases capital by 1 unit,then

• A)cost remains constant and output increases by 20 units.
• B)cost remains constant and output decreases by 20 units.
• C)output remains constant and cost increases by $8.
• D)output remains constant and cost decreases by $8.
• E)both cost and output remain constant.

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Definitions:

Unregulated Capitalism

An economic system without governmental oversight, where the market is left to operate without any checks or controls, potentially leading to monopolies and exploitation.

Virtues

Moral qualities or attributes regarded as beneficial or indicative of good character, such as honesty, courage, kindness, and integrity.

Babies

Very young children, especially those under one year of age.