A Firm Has a Production Function of Q = KL

question 33

Multiple Choice

A firm has a production function of Q = KL + L, where MP_L = K + 1 and MP_K = L. The
Wage rate (W) is $100 per worker and the rental (R) is $100 per unit of capital. In the short run, capital (K) is fixed at 4 and the firm produces 100 units of output. The firm's short-run total cost of producing 100 units of output is $____.

• A) 3,000
• B) 2,400
• C) 1,900
• D) 1,500

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Definitions:

U.S. Productivity

measures the efficiency of production in the United States, typically gauged by the output of goods and services per unit of labor input.

Gross Domestic Product

The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Nation's Total Productivity

A measure of the efficiency of production within a country, accounting for the output of goods and services relative to input resources.

Commonly Used Measure

A standard metric or unit of measurement frequently utilized in a particular context or field.