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What Is Not True When Thinking of the Firm's Objective

Question 7

Multiple Choice

What is not true when thinking of the firm's objective as a cost-minimization problem rather than as a profit-maximization problem?


A) The slope at any point on any isoquant reveals the marginal rate of technical substitution.
B) The firm chooses labor and capital to minimize its costs.
C) The firm chooses a particular level of output to produce.
D) The price of the output good never enters the decision as to how much labor or capital to employ.
E) The firm will choose labor and capital inputs so that the marginal productivity of labor relative to the marginal productivity of capital equals the price of labor relative to the price of capital.

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