A Firm Is Using 500 Units of Labor and 100

question 77

Multiple Choice

A firm is using 500 units of labor and 100 units of capital to produce 100 units of output.Labor costs $5 per unit and capital $20 per unit.At these input levels,another unit of labor adds 5 units of output,while another unit of capital adds 40 units of output.If the firm uses 496 units of labor and 101 units of capital instead,what will happen?

• A)Cost will be unchanged,and output will increase by 20 units.
• B)Cost will be unchanged,and output will increase by 35 units.
• C)Output will be unchanged,and cost will decrease by $20.
• D)Output will be unchanged,and cost will decrease by $40.

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Definitions:

Claim

An assertion, typically in an argument or debate, that something is true.

Argument Maker

A tool or person skilled at forming reasons, statements, or premises to support or oppose an idea or issue.

Rejected Alternative

A rejected alternative is an option that was considered in the decision-making process but ultimately not chosen.

Counterargument

Reasons or claims made to challenge an idea or theory presented in a prior argument.