Suppose a firm is using 100 units of labor and 50 units of capital to produce 200 completed client tax returns per day. The price of labor is $5 per unit and the price of capital is $2 per unit. The MPL equals 5 and the MPK equals 2. In this situation, the firm Question 29 Not yet answered Marked out of 0.50 Select one: P Flag question should decrease the use of both inputs. b. is minimizing its costs. c. could lower its production costs by decreasing labour input and increasing capital input. d. should increase the use of both inputs. e. could lower its production costs by increasing labour input and decreasing capital input. Question 30 In the 1890s nearly 50 percent of the Canadian population worked on a farm. Today, that number is less than 2 percent. One important Not yet answered explanation for this change is Marked out of 0.50 Select one: P Flag question a. the response to a rising price of capital and a falling relative price of labor. b. the response to a rising price of labor and a falling relative price of capital. c. that the marginal product of labor was falling over time while the marginal product of capital was rising. d. that over long periods of time, labor is always replaced by capital. e. that over long periods of time, capital is always replaced by labor.