26. Which of the following sets of economic data is minimizing the cost of producing a given level of output?
a) MPL = 20, MPK = 40, W = $32, r = $16.
b) MPL = 20, MPK = 40, W = $16, r = $32.
c) MPL = 40, MPK = 20, W = $16, r = $32.
d) MPL = 40, MPK = 40, W = $16, r = $32.
28. It is profitable to hire labor so long as
a) the MPL is greater than wage.
b) the MPL is less than wage.
c) the VMPL is less than wage.
d) the VMPL is greater than wage.
29. Which curve(s) does the marginal cost curve intersect at the (their) minimum point?
a) Average total cost curve.
b) Average fixed cost curve.
c) Average variable cost curve.
d) All of the above.
e) a and c only.
30. Given a cost function C(Q) = 100 + 14Q + 8Q^2, how would you express variable cost as a function of Q?
a) 14 + 16Q.
b) 14Q + 8Q^2.
c) 100 + 8Q^2.
d) 14 + 16Q^2.
Answer 26: (D)
At cost minimization level MPL=MPK
The solution answers a number of questions related to marginal analysis