Roberta Runs a Dress Factory

Multiple Choice

Roberta runs a dress factory.She produces 50 dresses per day, using labor and electricity.She uses a combination of labor and electricity that produces 50 dresses per day in the cheapest possible way.She can hire as much labor as she wants at a cost of 20 cents per minute.She can use as much electricity as she wants at a cost of 10 cents per minute.Her production isoquants are smooth curves without kinks and she uses positive amounts of both inputs.

A) The marginal product of a kilowatt-hour of electricity is twice the marginal product of a minute of labor.
B) The marginal product of a minute of labor is twice the marginal product of a kilowatt-hour of electricity.
C) The marginal product of a minute of labor is equal to the marginal product of a kilowatt-hour of electricity.
D) There is not enough information to determine the ratio of marginal products.We'd have to know the production function to know this.
E) The marginal product of a minute of labor plus the marginal product of a kilowatt-hour of labor must equal 50/(20 + 10) .