Multiple Choice
What is not true when thinking of the firm's objective as a cost-minimization problem rather than as a profit-maximization problem?
A) The slope at any point on any isoquant reveals the marginal rate of technical substitution.
B) The firm chooses to employ either labor or capital, depending on which factor is cheaper.
C) The firm chooses a particular level of output to produce.
D) The price of the output good does not enter the decision of how much labor or capital to employ once the total amount of output to produce has been determined.
E) The firm will choose labor and capital inputs so that the marginal productivity of labor relative to the marginal productivity of capital equals the price of labor relative to the price of capital.
Correct Answer:
Verified
Correct Answer:
Verified
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