A Firm Can Use 50 Workers and 10 Machines, 70

question 40

Multiple Choice

A firm can use 50 workers and 10 machines, 70 workers and 9 machines, or 75 workers and 9 machines to produce 40 chairs. If each worker costs $20 and each machine is rented for $500, the economically efficient input combination is:

• A) 50 workers and 10 machines.
• B) 70 workers and 9 machines.
• C) 75 workers and 9 machines.
• D) 120 workers and 19 machines.

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Definitions:

Wash Sale

A tax term referring to the sale of a security at a loss and the repurchase of the same, or substantially the same, security shortly before or after, which disallows the claim of the loss for tax purposes.

Substantially Identical

Refers to property or securities that are nearly the same, often used in tax rules concerning wash sales.

Fair Market Value

The price at which an asset would sell on the open market between a willing buyer and a willing seller.

Rental Business

An entrepreneurial activity where an individual or entity rents out properties or equipment to others for a profit.