Output for a simple production process is given by Q = 2KL, where K denotes capital, and L denotes labor. The price of capital is $25 per unit and capital is fixed at 8 units in the short run. The price of labor is $5 per unit. What is the variable cost of producing 80 units of output?
A. $25
B. $85
C. $33
D. $200
Answer: A
You might also like to view...
If a firm supplies 200 units at a price of $50 and 100 units at a price of $40, using the midpoint method, what is the price elasticity of supply?
A) 0.33 B) 1.00 C) 3.00 D) 5.00 E) 8.50
The goals of monetary policy tend to be interrelated. For example, when the Fed pursues the goal of ________, it also can achieve the goal of ________ simultaneously
A) economic growth; a low current account deficit B) high employment; lowering government spending C) stability of financial markets; a low current account deficit D) high employment; economic growth
According to the classical model, changes in aggregate demand are driven by
a. changes in taxes. b. changes in borrowing and lending. c. changes in fiscal policy. d. demand curve to the left and increases the price level.
If the government removes a binding price ceiling from a market, then the price paid by buyers will
a. increase, and the quantity exchanged will increase. b. increase, and the quantity exchanged will decrease. c. decrease, and the quantity exchanged will increase. d. decrease, and the quantity exchanged will decrease.