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

question 73

Multiple Choice

Bina'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. Bina 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 Bina's total cost of producing 60 umbrellas?

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

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Definitions:

Income Statement

A financial statement that shows a company's revenue and expenses over a specific period, culminating in its net income or loss.

Debt-To-Equity Ratio

An economic indicator reflecting the comparative levels of debt and shareholders' equity utilized in financing a company's assets.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically comprising the balance sheet, income statement, and cash flow statement.

Debt-To-Equity Ratio

A measure revealing the ratio of debt to shareholders' equity in the financing structure of a company's assets.