In the Mathematical Formulation of the Short-Run Production Function

question 72

Multiple Choice

In the mathematical formulation of the short-run production function:

• A)the quantity of output is usually assumed to be fixed.
• B)the quantity of capital employed is usually assumed to be fixed.
• C)the quantity of both labor and capital employed are usually assumed to be fixed.
• D)the quantity of both labor and capital must be allowed to vary so that output can vary in the short run.

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Definitions:

Market Rate

The current price or interest rate at which an asset or service can be bought or sold in a particular market.

Secured Bond

Specific assets are pledged as a guarantee of repayment at maturity.

Guarantee Repayment

The obligation of the guarantor to pay back the debt in case the debtor fails to make payments.

Specific Assets

Assets that are designated for a specific use or held to meet particular obligations, not readily used for other purposes.