A firm produces output with capital and labour. The production exhibits diminishing MRTSLK. Suppose that currently the MPL is 10 and MPK is 7. Each unit of labour costs w = $8 and each unit of capital costs r = $3.
1. Therefore, the firm [ is, is not]currently minimising its costs of production because:
a) MRTSLK = MPL/MPK [ true, false ]
b) MPK/r = MPL/w [ true,false ]
c) MRTSLK > MPL/MPK [ ture,false ]
d) MPK/r < MPL/w [ true,false ]
2. To minimise the cost of production holding the output constant, the firm should use [ more,less,the same amount of ] labour and [ more,less,the same amount of ] capital.
A firm produces output with capital and labour. The production exhibits diminishing MRTSLK. Suppose that currently the M
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answerhappygod
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