A firm wants to minimize the total cost of producing 100 tons of dynamite. The firm uses two factors of production, chemicals and labor. The combination of chemicals and labor that minimizes production costs will be found where:

A) the marginal products of chemicals and labor are equal.

B) the ratio of the amount of chemicals used to the amount of labor used equals the ratio of the marginal product of chemicals to the marginal product of labor.

C) the ratio of the amount of chemicals used to the amount of labor used equals the ratio of the price of chemicals to the wage rate.

D) the production of an additional unit of dynamite costs the same regardless of whether chemicals or labor are used.

D) the production of an additional unit of dynamite costs the same regardless of whether chemicals or labor are used.

Explanation:

The combination of chemicals and labor that minimizes production costs will be found where the production of an additional unit of dynamite costs the same regardless of whether chemicals or labor are used.

The average total cost would be minimized when the production level (chemicals or labor) of output at the marginal cost, mc is minimized.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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