Economists Use the Notation Q = F(L,K) to Describe

question 42

Multiple Choice

Economists use the notation Q = f(L,K) to describe

• A) the technological relationship between the inputs that a firm uses and the outputs that it produces.
• B) the flow of labour (L) and capital (K) services that are available when output is (Q).
• C) the arithmetic relationship between the outputs that a firm uses and the inputs that it produces.
• D) the financial relationship between the inputs that a firm uses and the outputs that it produces.
• E) the level of output (Q) required to fully employ labour (L) and capital (K).

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Definitions:

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total number of units produced.

Fixed Cost

refers to a business expense that remains constant regardless of the level of production or sales, such as rent or salaries.

Total Cost

The aggregate of every expense related to the creation of services or goods, taking into account both constant and fluctuating costs.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced, indicating the average cost per unit.