Assume that MP L = 10 and MP K = 6. Assume also that P L =

Question:

Assume that MP_L = 10 and MP_K = 6. Assume also that P_L = 4 and P_K = 2. This implies that the firm should substitute capital for labor. Explain why.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Principles Of Economics

ISBN: 9781292294698

13th Global Edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

See More Books

Question Posted: Feb 23, 2024 01:00 AM

See More Questions

Assume that MPL = 5 and MPK = 10. Assume also that PL = $2 and PK = $5. This implies that the firm should substitute labor for capital. Explain why.
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
PLEASE GIVE CORRECT ANSWERS Prove that the number of comparators in any sorting network is (n log n). [4 marks] (ii) What does Part (d)(i) imply in terms of the depth of any sorting network? [1 mark]...
Lets assume the client in the fact pattern in this weeks discussion board did not want to purchase the mothers house (in other words, forget about only those facts) and now has been appointed as the...
1. Whatever produces oxygen supports human life. Rain forests produce oxygen. Nothing that supports human life should be destroyed. Rain forests should not be destroyed. 2. No restrictive trade...
What is Twitch? Why did Amazon buy it? Why is it a compelling service for the firm?
Some might say that coding is not as important as analysis or design since programming errors can be identified and corrected easily. Do you agree with this statement? Why?
In 2011, Alliant Corporation acquired Centerpoint Inc. for $300 million, of which $50 million was allocated to goodwill . At the end of 2013, management has provided the following information for a...
What lessons can be gleaned from historical case studies and best practices in crisis management, informing contemporary approaches and fostering organizational learning and continuous improvement ?
In the isoquant/isocost diagram (Figure 1), suppose the firm is producing 1,000 units of output at point A using 100 units of labor and 200 units of capital. As an outside consultant, what actions...
Coffee shops often have different numbers of employees working at different times of day. At peak times, they typically have more people scheduled to work. When the second person is added to the...
Calculate the wavelength of the electromagnetic radiation required to excite a proton from the ground state to the level with n = 4 in a one-dimensional box 5.0 x 10 1 pm long.
On October 19, 2017, Matador Company borrowed $100,000 from FirstBank. The terms of the note were 115 days at 12% per year (simple interest). (5 marks) [I = Prt] a. On what date does the note mature?...
Define and contrast an Accounting Error with an Accounting Fraud. What differentiates them? Give an example.
Builtrite is considering the purchase of a new five-year machine worth $90,000. It will cost another $20,000 to install the machine and Builtrite will need to keep an extra $7,000 in inventory on...
Johnny's Milkshakes is producing an income statement for last year. What category of expense should their utility costs (electricity) go under?
Natasha earns revenue based on the value of the investment assets that she manages for her clients. What kind of remuneration structure does Natasha use?
Solving for an Interest Rate You are required to pay $5,000 for college fees for each of the next four years, and a not-quite-as-generous uncle offers to give you $14,275 toward your college fees....
Orange juice producers are dismayed and puzzled. An economist told them that the reason the demand for orange juice fell is that a new technology allow tomato producers to pick ripe tomatoes more...
Happy Bank starts with $200 in bank capital. It then takes in $800 in deposits. It keeps 12.5 percent (1/8th) of deposits in reserve. It uses the rest of its assets to make bank loans. a. Show the...
The Federal Reserve conducts a $10 million open-market purchase of government bonds. If the required reserve ratio is 10 percent, what is the largest possible increase in the money supply that could...
Assume that the reserve requirement is 5 percent. All other things equal, will the money supply expand more if the Federal Reserve buys $2,000 worth of bonds or if someone deposits in a bank $2,000...
Value of an internationally traded product has different components with different magnitude. Would you please take a product that is produced in two different countries (e.g., USA and Canada), and...
The Ivory Coast (Cte d'lvoire) leads the world in production and export of the cocoa beans used in the manufacture of chocolate. One metric ton (just under 2,205 pounds) of cocoa beans costs 1,896 US...
A machinist in Latvia is considering moving to Poland in search of higher paying work. Assuming her skills are equal to current Polish machinists, she expects to earn an annual salary of 50,000 in...

Assume that MP L = 10 and MP K = 6. Assume also that P L =

Question:

Step by Step Answer:

ANSWER In this scenario the Marginal Product of Labor MPL is 10 which means that each additional uni...View the full answer

Principles Of Economics

Students also viewed these Business questions