Musashi Cutter runs a surfing school on the North Shore of Oahu. He has two inputs: surfboards, which he rents from a local shop for $10 per day, and surfing instructors, whom he hires for $40 per day. Musashi has figured out that the marginal revenue product (MRP) of the last instructor hired is $400, and the MRP of the last board used is $300. Which of the following statements is correct? - Musashi will optimize his input combination if he employs more instructors and uses fewer surfboards - Musashi will optimize his input combination if he employs fewer instructors and use more surfboards - Musashi currently employs the optimal combination of surfboards and instructors

Musashi Cutter runs a surfing school on the North Shore of Oahu. He has two inputs: surfboards, which he rents from a local shop for $10 per day, and surfing instructors, whom he hires for $40 per day. Musashi has figured out that the marginal revenue product (MRP) of the last instructor hired is $400, and the MRP of the last board used is $300. Which of the following statements is correct? - Musashi will optimize his input combination if he employs more instructors and uses fewer surfboards - Musashi will optimize his input combination if he employs fewer instructors and use more surfboards - Musashi currently employs the optimal combination of surfboards and instructors

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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