AP Economics Mr. Bernstein Module 72: Cost Minimizing Input Combinations November 10, 2014.

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AP Economics Mr. Bernstein Module 72: Cost Minimizing Input Combinations November 10, 2014

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 Programming labor from India vs. Jersey Compliments in the Factor Market Trackhoe and operator 747 jet and pilot 2

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

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