A Firm Is Producing 1,000 Units of Output with 40

Short Answer

A firm is producing 1,000 units of output with 40 units of labor and 30 units of capital. The marginal product of the last units of labor and capital are, respectively, MP_L = 60 and MP_K = 120. The prices of labor and capital are, respectively, w = 30 and r = 40.
-To minimize the cost of producing 1,000 units of output the firm will increase ____________ and decrease ____________ until _________ equals _________ or, in other words, _________ equals _________.