Suppose MPL = 40 and MPK = 20 and the rental rate on capital is $10. If the level of production is currently efficient,the wage rate must be

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In an efficient level of production, the ratio of the marginal product of labor (MPL) to the wage rate (W) should equal the ratio of the marginal product of capital (MPK) to the rental rate of capital (R). Given MPL = 40, MPK = 20, and R = $10, we can set up the equation 40/W = 20/10. Solving for W gives us W = $20.

Suppose MPL = 40 and MPK = 20 and the Rental