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AP® Microeconomics

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Moderate

Factor Markets: Application of Cost-Minimization Rule

APMICR-DD4CEW

A firm is currently hiring 4 workers, and the marginal product of the 4th worker is 12. The firm also hires 6 units of capital, and the marginal product of the 6th unit is 10. The wages of workers are \$6, and the price of capital is \$5.

In order to minimize costs while producing the same output, this firm should

A

hire more workers and fewer units of capital.

B

hire fewer workers and more units of capital.

C

hire more workers and more capital.

D

hire fewer workers and less capital.

E

make no changes to the number of workers or capital hired.