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if marginal product of capital is 4000, and the marginal product of labour is 100 if the wage rate is $10 and the rental price of over is $500, costs do not appear to be minimized. what and how much of labour and ovens should be adjusted to minimize cost.

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Nusrat Fatima
Nusrat FatimaLv10
28 Sep 2019

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Related questions

27) Suppose that capital costs $10 per unit and labour costs $4 per unit. If the marginal product of capital is 50 and the marginal product of labour is 50, then in the long run the firm should in order to minimize its costs of producing its output. A) employ more capital and labour B) employ less capital and labour C) employ more capital and less labour D) employ less capital and more labour E) not change its current factor use

Is the owner of Pat's Pizza Restaurant minimizing costs? Explain using the data in the table.

Marginal Product of Capital

4,000

Marginal Produce of Labor

100

Wage Rate

$10

Rental Price of Pizza Ovens

$500

17. All of the following can raise union member wages except:

a. limiting union membership over time

b. increasing the demand for non-union made goods

c. increasing the productivity of union workers

d. increasing the demand for union-made goods

 

12. If a firm wants to maximize its profits, it should

a. equates the marginal revenue product for each input to the price of the input

b.hire unskilled labour rather than skilled labour since unskilled labour is cheaper

c. hire lots of capital and very little labour since labour needs to be trained

d. equate the marginal physical product for each input to the price of the input

 

10. A profit-maximizing monopolist will hire labour up to the point where

a. marginal revenue equals than the wage rate.

b. marginal revenue product is greater than the wage rate.

c. marginal revenue equals the price of the product.

d. marginal revenue product is less than the wage rate.

 

9. The practice of outsourcing has been given a boost by:

a. firms that are becoming more risk-averse.

b. advances in telecommunications and computer networking.

c. support from organized labour.

d.sharp increases in the cost of overseas labour.

 

8. Suppose firms in an industry hire unskilled labour and skilled labour. unskilled labour is a substitute for capital and skilled labour is a complement with capital. A decrease in the real price of capital would:

a. cause the demand for unskilled labour to increase and the demand for skilled labour to decrease. the wage of unskilled labour would rise relative to the wage of skilled labour

b. cause the demand for both kinds of labour to decrease. wages rates of both kinds of labour would decrease too.

c. cause the demand for labour to increase, raising wages of both skilled and unskilled labour.

d. cause the demand for unskilled labour to decrease and the demand for skilled labour to increase. the wage of unskilled labour would decrease relative to the wage of skilled labour.

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