Charlie's Umbrellas Has a Production Function Given by Q =

question 62

Multiple Choice

Charlie's Umbrellas has a production function given by Q = 10K^0.5L^0.5, where MP_L = 5K^0.5/L^0.5 and MP_K = 5L^0.5/K^0.5. Charlie is using 9 units of capital (K) in the short run. The wage (W) is $80 per day and the rental per unit of capital (R) is $5 per day. What is Charlie's total cost of producing 60 umbrellas?

• A) $445
• B) $365
• C) $108
• D) $276

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Definitions:

Liability

The condition of having legal accountability, particularly relating to debts or legal duties.

Assumption of The Risk

A legal defense that claims the plaintiff knowingly and willingly took on a dangerous activity or condition which led to injury.

Modified

Altered or changed in form, character, or substance, usually to improve or adapt to different situations.

Intentional Torts

Legal wrongs resulting from actions taken with the intent to cause harm or injury, as opposed to resulting from negligence or accidents.