A firm is using 500 units of capital and 20O units of labor to produce 10,000 units of output. Capital costs $25 per unit and labor $100 per unit. The last unit of capital added 50 units of output, while the last unit of labor added 20 units of output. The firm а. is using the cost- minimizing combination of capital and labor. b. should use more of both inputs in equal proportions. should use less of both С. inputs in equal proportions. d. level of output at a lower cost by using more capital and less labor. could produce the same could produce the same output at a lower cost by using less capital and more labor. е.

A firm is using 500 units of capital and 20O units of labor to produce 10,000 units of output. Capital costs $25 per unit and labor $100 per unit. The last unit of capital added 50 units of output, while the last unit of labor added 20 units of output. The firm а. is using the cost- minimizing combination of capital and labor. b. should use more of both inputs in equal proportions. should use less of both С. inputs in equal proportions. d. level of output at a lower cost by using more capital and less labor. could produce the same could produce the same output at a lower cost by using less capital and more labor. е.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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