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    The relative marginal products of labor and capital

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    A producer is hiring 20 units of labor and 6 units of capital (bundle A). The price of labor is $10, the price of capital is $2, and at A, the marginal products of labor and capital are both equal to 20. In equilibrium:
    a. MPL = MPK
    b. MPK will be more than 20
    c. MPK will be less than 20
    d. MPL will be 5 times MPK
    e. None of the above.

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    https://brainmass.com/economics/labour-economics/relative-marginal-products-labor-capital-155489

    Solution Preview

    In equilibrium, we have the following equation:

    MPL/w = ...

    Solution Summary

    The relative marginal products of labor and capital are embodied.

    $2.49

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