Suppose the marginal productivity of capital is 50 units of output and the marginal productivity of labor is 75 units of output. Capital costs $25 per hour and wages are $15 per hour. The firm: is minimizing its costs of production. has just the right amount of both inputs.. should hire more labor and use less capital. • should hire less labor and use more capital. is maximizing its profit.

Suppose the marginal productivity of capital is 50 units of output and the marginal productivity of labor is 75 units of output. Capital costs $25 per hour and wages are $15 per hour. The firm: is minimizing its costs of production. has just the right amount of both inputs.. should hire more labor and use less capital. • should hire less labor and use more capital. is maximizing its profit.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 6P

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