Asked by
David Brady
on Nov 26, 2024
Verified
Assume a pencil manufacturer is employing resources C and D in such quantities that the MRPs of the last units hired are $80 and $50, respectively. The price of resource C is $90, and the price of D is $35. This firm
A) should hire less of C and more of D.
B) should hire more of both C and D.
C) should hire less of both C and D.
D) is using the least-cost combination of C and D.
Least-Cost Combination
is an economic principle that firms achieve by using the mix of inputs that minimize their costs while producing a given level of output.
MRP
Marginal Revenue Product; the additional revenue generated by employing one more unit of a resource or factor of production.
Resources
Assets, materials, and inputs needed for the production of goods and services, including natural resources, labor, and capital.
- Perceive the fundamental role of the marginal productivity of resources in setting the allocation of resources and determining the expenses associated with production.
Verified Answer
SM
Learning Objectives
- Perceive the fundamental role of the marginal productivity of resources in setting the allocation of resources and determining the expenses associated with production.