If the cost of capital is $1,000 per hour, the wage paid to employees is $50 per hour, the marginal product of capital is 800 units per hour, and the marginal product of labor is 40 units per hour, to minimize its costs, the firm should _ .
A) decrease the amount of labor used and increase the amount of capital used
B) not change the amount of labor or capital
C) increase the amount of labor and capital used
D) increase the amount of labor used and decrease the amount of capital used
Correct Answer:
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Q38: When a firm hires an additional worker,
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