A producer is hiring 20 units of labor and 6 units of capital (Bundle A).

A producer is hiring 20 units of labor and 6 units of capital (Bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. The producer is a. using the optimal combination of capital and labor b. should use more capital and less labor c. should use more labor and less capital d. cannot determine without more information

If the fixed cost of producing 100 is $130, then

If the fixed cost of producing 100 is $130, then a. fixed cost of producing 0 is $0, b. fixed cost of producing 0 is less than $130 c. fixed cost of producing 200 is $260 d. fixed cost of producing 200 is $130 e. cannot determine

Short Run/Long Run Cost

You read a story in the newspaper about the "economy of mass production". This means that a. total cost is less a larger levels of production b. long run average costs is less at larger levels of production c. marginal cost is less at larger levels of production d. fixed cost is less at larger levels of production

The marginal product of labor

The marginal product of labor a. measures how output changes as the wage rate changes b. is equal to the average product of labor divided by the amount of capital stock c. is greater than the average product of labor when the average product of labor is decreasing d. can be negative e. a and b

A producer is hiring 20 units of labor and 6 units of capital.

A producer is hiring 20 units of labor and 6 units of capital (bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. In equilibrium: a. MPL = MPK b. MPK will be more than 20 c. MPK will be less than 20 d. MPL will be 5 times MPK e. None of the above