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Posted: December 22nd, 2023
ECON 2304 – A firm is currently using two inputs
A firm is currently using two inputs: labor and capital. It rents equipment for $1,000, which produces a value of the marginal product of $5,000. It hires workers at $10 an hour who produce a value of the marginal product of $100. The wages of workers rise by 20% and the rental price of capital increases by 25%. The firm should hire __________ labor and __________ capital.a.less; moreb.the same amount; the same amountc.more; lessd.more; moree.less; less
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