The capital stock is fixed at 5 units, the price of capital is $60 per unit, and the price of labor is $20 per unit. 
Based on the above, if the firm produces 80 units of output, what is its total cost of production?
A. $5,040
B. $1,900
C. $540
D. $1,600
E. none of the above
Answer: C
You might also like to view...
Transactions costs are the
A) costs of using the Coase theorem. B) opportunity costs of conducting a transaction. C) external marginal costs of the externality. D) reason why taxes cannot affect the inefficiency resulting from an external cost. E) external costs when a firm pollutes.
Assume that the real rate of interest is 5 percent and a lender charges a nominal interest rate of 15 percent. If a borrower expects that the rate of inflation next year will be 10 percent and the actual rate of inflation next year is 10 percent,
a. the lender benefits from inflation, while the borrower loses from inflation. b. the borrower benefits from inflation, while the lender loses from inflation. c. neither the borrower nor the lender benefits from inflation. d. both the borrower and the lender lose from inflation.
At the equilibrium price, the quantity that buyers are willing to purchase is ______ to the quantity that sellers are willing to supply.
a. exactly equal b. almost equal c. more than d. less than
The basic idea behind the convergence theory is:
A. also the basic idea behind the catch-up effect. B. each additional unit of capital provides larger gains when you're coming from behind. C. that countries starting at low levels of income will tend to grow at much faster rates than those starting with high levels of income. D. All of these are true.