Suppose the production function is given by Q = K1/2L1/2, and that Q = 30 and K = 25. How much labor is employed by the firm?
A. 6
B. 36
C. 25
D. 49
Answer: B
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Carefully define the following terms and explain their importance to the study of economics. a. Resources b. Rational decision c. Scarcity d. Opportunity cost
What will be an ideal response?
If on Tuesday the perceived price of studying for an exam is $4 per hour but on Saturday the perceived price of studying for an exam is $10, the law of demand predicts
A) more studying on Saturday and less on Tuesday. B) more studying on Tuesday and less on Saturday. C) the same amount of studying on Tuesday and Saturday. D) no studying on Tuesday or Saturday.
We would expect that a fall in labor supply will have a proportionately larger effect on the market wage rate when
A) capital goods exist that can replace many of the workers. B) the product produced in the industry has several close substitutes. C) the product produced in the industry makes up a large portion of most families' budgets. D) labor represents a relatively small portion of total costs.
The present value of future payments depends on:
a. whether the payment is interest or dividends. b. the marginal propensity to save. c. the interest rate. d. sunk costs.