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5. In the region of the long-run average cost curve that
corresponds to diseconomies of scale, what is happening to
the cost per knife?
8. Suppose a firm finds that the marginal product of capital is 60 and the
marginal product of labor is 20. If the price of capital is $6 and the
price of labor is $2.50, how should the firm adjust its mix of capital
and labor? What will be the result?
9. A firm minimizes its costs by using inputs such that the marginal
product of labor is 10 and the marginal product of capital is 20. The
price of capital is $10 per unit. What must the price of labor be?
10. Suppose that the price of labor is $10 per unit and the price of
capital is $20 per unit.
1. Assuming the firm is minimizing its cost, if the marginal
product of labor is 50, what must the marginal product of
capital be?
2. Suppose the price of capital increases to $25 per unit, while
the price of labor stays the same. To minimize the cost of
producing the same level of output, would the firm become
more capital-intensive or labor-intensive? Explain.

Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

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