How Much Labor Does a Firm Require to Produce Q

question 58

Multiple Choice

How much labor does a firm require to produce q = 1000 when capital is fixed at 5 and they have a production function equal to q = 200L^0.5K^0.5?

• A) L = 5
• B) L = 2.5
• C) L = 200
• D) L = 2.25

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Definitions:

Job-Order Costing

A cost accounting system that accumulates costs by specific jobs or orders, suitable for companies producing unique products or services.

T-Accounts

A graphical representation used in accounting to depict accounts, showing debits on the left and credits on the right.

Direct Materials Cost

The expense associated with raw materials and components directly involved in producing a product.

Raw Materials

The fundamental elements and parts employed during manufacturing to create final products.