Author Question: When we solve the firm's cost minimization problem by the method of Lagrange multipliers, the ... (Read 255 times)

fahad · **on:** Jul 1, 2018

When we solve the firm's cost minimization problem by the method of Lagrange multipliers, the optimal value of the Lagrange multiplier equals the:

A) marginal product of labor.
B) marginal product of capital.
C) marginal cost of production.
D) cost-output elasticity.

Question 2

From any point within the production possibilities frontier,

A) the only way to increase production of one good is to decrease production of the other.
B) it is possible to increase both people's utility.
C) it is possible to increase output of both goods.
D) any move will necessarily decrease production of some good.