In order to hire the least-cost combination of labor and capital, the firm must do which of the following?
A.
Find the combination of labor and capital where the marginal product of labor is equal to the marginal product of capital.
B.
Find the combination of labor and capital where the ratio of the marginal product of labor to the marginal product of capital is equal to one.
C.
Find the combination of labor and capital where the marginal product of labor divided by the price of labor is equal to the marginal product of capital divided by the price of capital.
D.
Find the combination of labor and capital where the price of labor is equal to the price of capital.
E.
Find the combination of labor and capital where the marginal revenue product of labor is equal to the marginal revenue product of capital.
Exam No： AP Micro Practice Test 4 Year：2024 Question No：54
Answer:
C
Knowledge points:
1.6 Marginal Analysis andConsumer Choice
3.1 The Production Function
5.3 Profit-Maximizing Behavior in Perfectly Competitive Factor Markets
Solution:
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