Author Question: Suppose capital costs $6 per unit and labour costs $3 per unit. If the marginal product of capital ... (Read 108 times)

0220521 · **on:** Oct 12, 2022

Question 1

Suppose capital costs $10 per unit and labour costs $5 per unit. For a profit-maximizing firm operating at its optimal factor mix, if the marginal product of capital is 50, the marginal product of labour must be
◦ 20.
◦ 100.
◦ 50.
◦ 25.
◦ 10.

Question 2

Suppose capital costs $6 per unit and labour costs $3 per unit. If the marginal product of capital is 3 and the marginal product of labour is 6, the cost-minimizing firm should
◦ employ more of both capital and labour.
◦ employ less of both capital and labour.
◦ employ more capital and less labour.
◦ employ less capital and more labour.
◦ not change its current factor use.

bleep bloop · **Reply #1 on:** Oct 12, 2022

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