Firms need to decide the proportion of various inputs they will employ in producing their output in order to either minimize cost or maximize profit. Assume that the maker of Samsung appliances is employing variable resources Capital (X) and Labour (Y) in such amounts that the MRPs of the last units of X and Y employed are $100 and $60, respectively. Resource X can be hired at $50 per unit and resource Y at $80 per unit. The firm Multiple Choice shut down. should hire more of both X and Y. is using the least-costly combination of X and Y but could increase its profits by employing less of both X and Y. should hire more of X and less of Y. is producing with the least-costly combination of X and Y but could increase its profits by employing more of X and less of Y.
Firms need to decide the proportion of various inputs they will employ in producing their output in order to either minimize cost or maximize profit. Assume that the maker of Samsung appliances is employing variable resources Capital (X) and Labour (Y) in such amounts that the MRPs of the last units of X and Y employed are $100 and $60, respectively. Resource X can be hired at $50 per unit and resource Y at $80 per unit. The firm Multiple Choice shut down. should hire more of both X and Y. is using the least-costly combination of X and Y but could increase its profits by employing less of both X and Y. should hire more of X and less of Y. is producing with the least-costly combination of X and Y but could increase its profits by employing more of X and less of Y.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Q60
Firms need to decide the proportion of various inputs they will employ in producing their output in order to either minimize cost or maximize profit. Assume that the maker of Samsung appliances is employing variable resources Capital (X) and Labour (Y) in such amounts that the MRPs of the last units of X and Y employed are $100 and $60, respectively. Resource X can be hired at $50 per unit and resource Y at $80 per unit. The firm
Multiple Choice
-
shut down.
-
should hire more of both X and Y.
-
is using the least-costly combination of X and Y but could increase its profits by employing less of both X and Y.
-
should hire more of X and less of Y.
-
is producing with the least-costly combination of X and Y but could increase its profits by employing more of X and less of Y.
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