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AP Economics

AP Economics. Mr. Bernstein Module 72: Cost Minimizing Input Combinations November 11, 2013. AP Economics Mr. Bernstein. Least-Cost Combination of Inputs Substitutes in the Factor Markets Nail gun vs. Labor + hand held hammers Trackhoe vs. Labor + shovels ATM vs. bank teller

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AP Economics

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  1. AP Economics Mr. Bernstein Module 72: Cost Minimizing Input Combinations November 11, 2013

  2. AP EconomicsMr. Bernstein Least-Cost Combination of Inputs • Substitutes in the Factor Markets • Nail gun vs. Labor + hand held hammers • Trackhoe vs. Labor + shovels • ATM vs. bank teller • Programming labor from India vs. Jersey • Compliments in the Factor Market • Trackhoe and operator • 747 jet and pilot

  3. AP EconomicsMr. Bernstein Least-Cost Combination of Inputs • Cost Minimization Rule: MPL/w = MPK/r • If marginal product per dollar of labor and capital are not equal, firm will adjust to find optimal mix

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