A firm is using 50 units of labor and 20 units of capital to produce 2000 units of output. At this combination the marginal product of labor is 15 and the marginal product of capital is 20. The price of labor is $10 and the price of capital is $50.
a. The MP per dollar of labor is: ______ and the MP per dollar of capital is:__________
b. The firm can increase labor by one unit and decrease capital by:______units while keeping output constant. This will (increase, decrease, not change) cost by:________
c. IF the firm increases labor and reduces capital the marginal product of capital will (rise, fall, remain the same), while the marginal product of labor will (rise, fall, remain the same)
d. To produce the current output at the minimum cost the firm will increase:______and decrease____until the______equals______