Final answer:
The statement is False. A firm maximizes profits by equating the marginal revenue product of labor to the marginal cost of labor, not the marginal expense of capital.
Step-by-step explanation:
The statement when maximizing profits a firm will always be equating the marginal expense of labor to the marginal expense of capital is False.
When a firm wants to maximize profits, it will never pay more for a worker than the value of their marginal productivity to the firm. This means that a profit-maximizing firm will hire workers up to the point where the marginal revenue product (MRP) equals the marginal cost of labor (MCL), not the marginal expense of capital.
For example, if the going market wage is $20, the profit-maximizing level of employment would be determined by the point where the MRP of labor is equal to $20, and the firm would hire the corresponding number of workers. The marginal expense of capital is not considered in this context.