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allsm [11]
4 years ago
10

Suppose a firm is producing the profit-maximizing level of output and the MP of capital and labor are 10 and 20, respectively. I

f the wage is $10 and the rental rate for capital is $25, which of the following is true? To minimize costs the firm should
A. Use more capital.
B. Hire more labor and use less capital.
C. Hire less labor and use more capital.
D. Hire less labor.
Business
1 answer:
Darya [45]4 years ago
4 0

Answer:

B. Hire more labor and use less capital.

Explanation:

The firm producing at the profit-maximizing level of output means that Marginal Revenue = Marginal Cost, it can also be said that Marginal Productivity = Marginal wage/rent (Factor cost).

Therefore to minimize cost there should be a selection of factor mix that will be more efficient (i.e. comparing the cost of input to output) <u>which will be to use more of the cheaper input and less of the costlier input</u>

<u>Since the cost of labor is $10 and that of capital is $25, compared to the marginal productivity of 10 and 20 respectively, it can be seen that labor is the more efficient resource or factor. </u>

<u>Therefore</u><u> the cost minimizing choice of inputs</u><u> will be more of labor and less of capital will minimize costs</u>

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What may be the opportunity cost of buying apples?​
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Answer:

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3 years ago
Mariah is single and has a monthly disposable income of $3,200. Her monthly cash outflow is approximately $2,800. Mariah include
Alexus [3.1K]

Answer:

He would encourage her to cut the cost on her apartment, by choosing a cheaper apartment.

Explanation:

According to the statement in the question, Mariah saved a total of $15,000, and wishes to make a down payment of $10,000 on house alone. $10,000 is approximately 67% of the total savings. From further description of the house, we find out that she has a spare bedroom in her apartment which she will also pay for as part of the house payment but she will not use, and Mariah is single. If $10,000 dollars go into her apartment alone, the balance of $5,000 dollars will be insufficient to pay for the other expense which includes; the cash outflow of $2,800, the contribution to a retirement plan, care and life insurance policies and purchase of furnishings, not to talk of the other bills like groceries, cable, water etc. even with her monthly income of $3,200, she will run into debt. Hence she will be advised to settle in a cheaper apartment.

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shutvik [7]

Answer:

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