Suppose output for a simple production process is given by Q = K + L, where K denotes capital, and L denotes labor. The price of labor is $2 per unit and the price of capital is $4 per unit. What would be the minimum costs of producing 10 units of output?
A. $10
B. $40
C. $20
D. It is impossible to say with the information given
Answer: C
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When real interest rates in other countries rise relative to those the United States, all else held constant, we would expect the U.S. dollar to ________.
A. inflate B. depreciate C. appreciate D. deflate
Country X produces only one good. It produced 12,500 units of a good during a particular year. If the price of the good during that year was $100 and the price of the good during the previous year was $95, the nominal GDP of the country is ________
A) $875,000 B) $1,187,500 C) $2,450,000 D) $1,250,000
Since 1970 there has been a clear increase in the proportion of the banking industry assets made up of
A) mortgage loans. B) state and local government securities. C) cash. D) business loans.
How does government provision of public goods solve the free rider problem?
A) Governments can impose compulsory taxes to pay for public goods. B) Governments can convert nonrival goods to rival goods by assigning property rights. C) Governments can tax public goods to prevent over-use of the resources. D) Governments cannot solve the free rider problem