Frequent Exam Questions without Answers
The Least-Cost Rule and Isoquant Analysis
Chapter 11 ― Question 8
A firm employs 20 units of labour and pays $20 for each. It employs 20 units of capital and pays $60 for each. The marginal product of capital is twice that of labour. The firm should
- double labour
- substitute capital for labour
- increase labour
- double capital
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Chapter 11― Question 9
A firm moves from one point on an isoquant curve to another on the same isoquant curve. Which of the following will not happen
- a change in the mix of the inputs
- a change in the quantity of output
- a change in the costs of production
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