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:

Total Utility

The total satisfaction or benefit derived by a consumer from consuming a given quantity of goods or services.

Utils

A hypothetical unit of measurement used in economics to quantify utility or satisfaction gained from consuming a good or service.

Process Innovation

The implementation of a new or significantly improved production or delivery method in business operations.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.