Respuesta :
Answer:
Use more labor and fewer capital.
Explanation:
Given that,
For producing 10,000 gadgets,
Labor hours use = 80
Capital = 6 units
Marginal product of labor = 4 gadgets per hour
Marginal product of capital = 20 gadgets per unit
Cost of each unit of labor = $8 per hour
Cost of each unit of capital = $50 per unit
Therefore,
Marginal product per dollar for labor is as follows:
[tex]\frac{MP_{L} }{w} =\frac{4}{8}[/tex]
= 0.5
Marginal product per dollar for capital is as follows:
[tex]\frac{MP_{k} }{r} =\frac{20}{50}[/tex]
= 0.4
Hence, the marginal product per dollar for labor is greater than the marginal product per dollar for capital, which means that the firm should use more labor and fewer capital.
