If the Price of Labor Is $5 and the Price

question 5

Multiple Choice

If the price of labor is $5 and the price of capital is $10,what is the marginal rate of technical substitution at the optimal input choice?

• A)0.5
• B)2
• C)decreasing
• D)increasing
• E)none of the above

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Definitions:

Past Consideration

Something completed before an agreement is made; it is not valid consideration.

Early Repayment

The act of paying off a loan or mortgage before the agreed-upon due date, often resulting in financial penalties.

Equitable Estoppel

A legal defense tool that prevents a party from taking back a promise or from arguing against facts they previously admitted to, when another party has relied on that promise or those facts.

Legal Obligation

A duty enforced by law, requiring an individual or entity to conform to certain conduct or to refrain from certain actions.