An Economy Is Employing 2 Units of Capital, 5 Units

question 179

Multiple Choice

An economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labour to produce its total output of 640 units.Each unit of capital costs $10, each unit of raw materials, $4, and each unit of labour, $3.Refer to the above information.If the per unit price of raw materials rises from $4 to $8 and all else remains constant, the per unit cost of production will rise by about:

• A)100 percent.
• B)50 percent.
• C)40 percent.
• D)30 percent.

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Definitions:

Operating System

The software that manages the hardware and software resources of a computer system and provides common services for computer programs.

Large Profits

Substantial earnings exceeding the costs of production and operation of a business.

Innovation

The process of creating new ideas, products, or methods, which can significantly change market dynamics or societal practices.

Annual Interest Rate

The percentage of the principal amount of a loan that is charged as interest to the borrower for one year.