A Capital (machines per hour) Q = 50,000 Labor (workers per hour) 10,000 5. Refer to the figure above. A firm has a budget of $200,000 to spend on labor and capital. It is currently producing 50,000 units of output using input bundle "A". The price of capital is $50 per machine hour. The slope of the isocost line (in absolute value) is _, and at point A the marginal product per dollar spent on labor is the marginal product per dollar spent on capital. a. 2/5; greater than b. 2/5; less than c. 5/2; greater than d. 5/2; less than (See Besanko 6 and 7.4 and Cost Practice Problems #5.) 6. A consulting firm has just finished a study for a manufacturer of wine. The production of wine exhibits a diminishing MRTS. It has determined that an additional hour of labor would increase wine output by 800 gallons per day. Adding another machine-hour of fermentation capacity would increase output by 400 gallons per day. The price of an hour of labor is $12 per hour. The price of a machine-hour of fermentation capacity is $5 per hour. To produce more at the same cost the firm should a. use more capital and less labor. b. use less capital and more labor. c. use more capital and more labor. d. use less capital and less labor. e. Not enough information is given to answer this