Holding the Human Capital Per Worker and Technology Unchanged, the Estimated

question 98

Multiple Choice

Holding the human capital per worker and technology unchanged, the estimated aggregate production function in Jamaica is Y / L = 50 * K / L, where Y = real output, L = number of workers, and K = quantity of physical capital. If K / L = $81, then real GDP per worker is:

• A) $4,050.
• B) $4,000.
• C) $4,096.
• D) $40,500.

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Definitions:

Variable Overhead

Costs of indirect production materials or services that fluctuate with the level of production activity, such as utilities for a factory.

Direct Labor-hours

The amount of labor time spent by workers directly involved in the manufacturing process, restated as "The quantity of labor time directly utilized in producing goods."

Variable Overhead Efficiency Variance

The difference between the actual variable overhead based on the standard cost and the variable overhead applied to production based on actual activity levels.

Direct Labor-hours

The total hours of labor directly involved in the production of goods or services.