The following table shows the marginal products of capital (K)and labour (L)for various methods for Firm ABC to produce 1000 toys per day.
TABLE 8-2
-Refer to Table 8-2.As this firm switches from production method A to production method G,production is
A)moving farther and farther away from cost minimization.
B)becoming more capital intensive and less labour intensive.
C)becoming more profitable.
D)becoming more labour intensive and less capital intensive.
E)remaining at a cost-minimizing level of output.

Question

The following table shows the marginal products of capital (K)and labour (L)for various methods for Firm ABC to produce 1000 toys per day.
  TABLE 8-2
-Refer to Table 8-2.As this firm switches from production method A to production method G,production is
A)moving farther and farther away from cost minimization. 
B)becoming more capital intensive and less labour intensive. 
C)becoming more profitable. 
D)becoming more labour intensive and less capital intensive. 
E)remaining at a cost-minimizing level of output.

Quizplus · Accepted Answer

Switching from production method A to production method G indicates a shift towards using more capital and less labor, making the production process more capital intensive.

The Following Table Shows the Marginal Products of Capital (K)and