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    The document provides a table showing the marginal product of capital and marginal product of labor schedules for a firm. It states that the firm hires capital for $2 and labor for $6 competitively. It asks (a) if the firm is producing output using 8 units of capital and 6 units of labor at least cost, and how we know, and (b) what the least-cost combination of labor and capital is.

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    The document provides a table showing the marginal product of capital and marginal product of labor schedules for a firm. It states that the firm hires capital for $2 and labor for $6 competitively. It asks (a) if the firm is producing output using 8 units of capital and 6 units of labor at least cost, and how we know, and (b) what the least-cost combination of labor and capital is.

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    © All Rights Reserved
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    45 views1 page

    AP Microeconomics 7.2 Practice Assignment

    Uploaded by

    Rachel Dong
    The document provides a table showing the marginal product of capital and marginal product of labor schedules for a firm. It states that the firm hires capital for $2 and labor for $6 competitively. It asks (a) if the firm is producing output using 8 units of capital and 6 units of labor at least cost, and how we know, and (b) what the least-cost combination of labor and capital is.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
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    AP Microeconomics

    7.2 Practice Assignment

    1. Suppose a firm's marginal product of capital and marginal product of labor schedules are as shown in
    the table below. The firm hires both capital and labor competitively for $2 and $6, respectively.

    MP of MP of
    Capital Labor
    Capital Labor

    0 0

    1 10 1 28

    2 9 2 30

    3 8 3 24

    4 7 4 20

    5 6 5 16

    6 5 6 12

    7 4 7 8

    8 3 9 4

    a Suppose the firm is currently using 8 units of capital and 6 units of labor. Is the corresponding
    output being produced at least cost? How do you know?

    b What is the least-cost combination of labor and capital?

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