A Firm's Production Function Is Given by Q = KL $\frac { 2 } { 9 }$

question 9

Multiple Choice

A firm's production function is given by Q = KL
Unit capital and labour costs are $2 and $1 respectively. Find the maximum level of output if the total cost of capital and labour is $6.

• A) \(\frac { 2 } { 9 }\)
• B) \(\frac { 11 } { 9 }\)
• C) \(\frac { 4 } { 3 }\)
• D) \(\frac { 9 } { 2 }\)
• E) \(\frac { 2 } { 3 }\)

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer balances from temporary to permanent accounts.

Income Summary

An account used in the closing process that summarizes all income and expenses for the period, leading to the net profit or loss.

Reversing Entry

An accounting entry that is made at the beginning of a period to negate or cancel out the effects of an adjusting entry made at the end of the previous period.

Common Stock

Holding shares in a corporation that come with privileges to make decisions through voting and to earn dividends from the company's earnings.