The production function for fish harvesting is Cobb-Douglas. Currently, the Marginal Rate of Technical Substitution (MRTS) between Labor (L) and Capital (K) is higher than the wage to rent ratio (MRTS > w/r). This means that, a. More labor and less capital should be used to lower costs b. More capital and less labor should be used to lower costs c. Labor and Capital being used are already minimizing costs d. We need to know the fixed costs of production to determine if costs are minimized or not

a. More labor and less capital should be used to reduce cost.

Explanation:

Condition for profit maximization is where the Marginal rate of technical substitution = Ratio of factor-input prices. This condition is known as a Producer Optimum in Long Run. MRTS itself is the ratio of Marginal Productivity of Labor to Capital. Thus, MRTS > w/r implies that Relative marginal productivity of labor is greater than relative cost of labor. This means that labor comes cheaper than capital when both their productivities are compared. So it is profitable to employ more labor than capital. This will continue till wages increase up to the point where MRTS = w/r.

answer; that person may have a larger tax bill to pay on income taxes;

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know