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Refer to the Following

Question 25

Multiple Choice

Refer to the following:
The price of capital (r) is $20.
Refer to the following: The price of capital (r) is $20. -Why wouldn't the firm choose to produce 5,000 units of output with the combination at A? A) At A, MRTS < 3/2. B) At A, MP<sub>K</sub> / r > MP<sub>L </sub>/ w. C) At A, MP<sub>L</sub> > MP<sub>K</sub>. D) both a and b E) none of the above
-Why wouldn't the firm choose to produce 5,000 units of output with the combination at A?


A) At A, MRTS < 3/2.
B) At A, MPK / r > MPL / w.
C) At A, MPL > MPK.
D) both a and b
E) none of the above

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