A firm requires labor and capital to produce a given output. Labor costs $8 per hour and capital costs $12 per hour. At the current level of output, the marginal product of labor is 48 and the marginal product of capital is 60. To minimize production costs, in which way should the firm allocate its resources? 2. A firm requires labor and capital to produce a given output. Labor costs $8 0/6per hour and capital costs $12 per hour. At the current level of output, themarginal product of labor is 48 and the marginal product of capital is 60. Tominimize production costs, in which way should the firm allocate itsresources? "LaborCapitala. Increaseincreaseb. Increasedecreasec. No changeincreased. Decreaseno changee. No changeno changeAB.

A firm will maximize profit or minimise cost at a point where marginal rate of technical…

Answered: 2. A firm requires labor and capital to…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4QR

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A firm requires labor and capital to produce a given output. Labor costs $8 per hour and capital costs $12 per hour. At the current level of output, the marginal product of labor is 48 and the marginal product of capital is 60. To minimize production costs, in which way should the firm allocate its resources?

2. A firm requires labor and capital to produce a given output. Labor costs $8 0/6
per hour and capital costs $12 per hour. At the current level of output, the
marginal product of labor is 48 and the marginal product of capital is 60. To
minimize production costs, in which way should the firm allocate its
resources? "
Labor
Capital
a. Increase
increase
b. Increase
decrease
c. No change
increase
d. Decrease
no change
e. No change
no change
A
B.

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