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For each of the following cases, determine whether the firm should Use more labor and less capital, or Use more capital and less labor. NOTE:

For each of the following cases, determine whether the firm should

  • Use more labor and less capital, or
  • Use more capital and less labor.

NOTE: Answer exactly "Use more labor and less capital" or"Use more capital and less labor."

The marginal rate of technical substitution is initially equal to the input price ratio, but the firm's machines depreciate, so that the marginal product of capital decreases.

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