A firm's marginal product of labor is 5 and its marginal product of capital is 4. If the firm adds one unit of labor, but does not want its output quantity to change, the firm should: use five fewer units of capital. add 1.25 units of capital. use 0.8 fewer units of capital. use 1.25 fewer units of capital.
A firm's marginal product of labor is 5 and its marginal product of capital is 4. If the firm adds one unit of labor, but does not want its output quantity to change, the firm should: use five fewer units of capital. add 1.25 units of capital. use 0.8 fewer units of capital. use 1.25 fewer units of capital.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A firm's marginal product of labor is 5 and its marginal product of capital is 4. If the firm adds one unit of labor, but does not want its output quantity to change, the firm should:
use five fewer units of capital.
add 1.25 units of capital.
use 0.8 fewer units of capital.
use 1.25 fewer units of capital.
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