A Firm with a Production Function Q = KL (Where

question 9

Multiple Choice

A firm with a production function Q = KL (where K is units of capital and L is units of labor) has an expansion path that is given by K = 2L. The wage rate (W) is $20 and the rental on capital is $10. Assuming that the firm is using the optimal mix of inputs for any given output level, the total cost when using two units of labor is $____.

• A) 160
• B) 120
• C) 80
• D) 40

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Definitions:

Organizational Psychology

An I/O psychology subfield that examines organizational influences on worker satisfaction and productivity and facilitates organizational change.

Motivation

The mechanism that starts, directs, and sustains behaviors aimed at achieving goals.

Human Factors Psychologist

A professional who applies psychological principles to the design of products, processes, and systems to optimize human well-being and overall system performance.

Person-machine Interactions

The study and design of systems and environments where humans and machines cooperate or interact.