A firm's choice about how much physical capital to employ differs from its choice of how much labor to employ because
a. the firm has to pay for its capital
b. the productivity of labor depends on the firm's production function
c. firm must compare the marginal costs and benefits of acquiring more capital
d. firms do not own the labor they employ, but they frequently purchase capital outright
e. labor is productive but capital is not
D
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Mr. Smith won a laptop in an online auction in which bidders could see each other's bid and price increased with every new bid
a) If Mr. Smith values the laptop at $400, find out his dominant strategy. b) Will there be a change in his optimal bidding strategy if there is an increase in the number of bidders?
Economic rent is a concept that can be applied
A) only to land, as that is the only resource that is in limited supply. B) only to land and natural talent. C) to any factor of production that is fixed in supply. D) to any resource or factor of production that has a supply curve with a positive (upward) slope.