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JAMB Economics 1985 Question 17

Question 17

Theory of Production

The amount of labour a producer hires relative to other factor inputs depends on the

  1. A.price of labour or its wage
  2. B.price of labour, machinery and other inputs
  3. C.price of machinery
  4. D.price of the other inputs
  5. E.type of machinery.
Show the answer and explanation

Answer: B (price of labour, machinery and other inputs)

Explanation

A producer compares the price of labour with the prices of machines and other inputs before choosing the mix of factors.