Exhibit 22-14 Assume That Labor Is the Only Variable Input

question 89

Multiple Choice

Exhibit 22-14

Assume that labor is the only variable input.
-Refer to Exhibit 22-14.What is the level of output with 2 and 3 laborers working [blanks (A) and (B) ]?

• A) 175 units; 225 units
• B) 100 units; 175 units
• C) 100 units; 225 units
• D) 50 units; 175 units
• E) none of the above

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Definitions:

Risk Averse

The preference to avoid uncertainty, expressing a behavior where individuals prefer known risks over unknown outcomes.

Financial Investment

Allocating money into an asset or a project with the expectation of generating income or profit.

Government Bond

A type of investment where an investor loans money to a government in exchange for periodic interest payments plus the return of the bond's face value at maturity.

Moral Hazard

The situation where one party in a transaction has the opportunity to take risks because they know the other party will bear the costs.