It Took 60 Hours to Make the First Unit of a Product

question 22

Multiple Choice

It took 60 hours to make the first unit of a product. After the second and third units were made, the learning curve was estimated to be 80%. At $10 per hour, estimate the labor bill for the fourth unit. (Use at least three decimals in the exponent if you use the logarithmic approach.)

• A) $400 or less
• B) from $400 to $420
• C) from $420 to $440
• D) from $1800 to $2000
• E) over $2000

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Definitions:

Coffee

A beverage made from the roasted and ground seeds of a coffee plant, consumed globally for its stimulating effect.

Comparative Advantage

The concept that a country, individual, or company produces a good or service at a lower opportunity cost than their competitors.

Trade

The exchange of goods or services between parties, which could be within an economy or between economies.

Coffee

A brewed drink prepared from roasted coffee beans, which are the seeds of berries from the Coffea plant.