AP Microeconomics Unit 5 Practice Test

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Assume the marginal product of robots is 10,000 and the price of a robot is $1,000, while the marginal product of labor is 81 and the price of labor is $9. What should the firm do?

Increase the amount of capital and decrease labor An increase in the demand for the workers who produce fidget spinners pay less and hire fewer workers than a perfectly competitive market A decrease in supply of the good

Correct Answer:

Increase the amount of capital and decrease labor

Explanation:

Correct answer: Increase the amount of capital and decrease labor

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