Suppose That a Hot Dog Vendor Uses a Cart (K)

question 45

Multiple Choice

Suppose that a hot dog vendor uses a cart (K) and his time (L) to make and sell hot dogs. The vendor's production function is , where Q is the number of hot dogs per day. Suppose that the rental on hot dog carts is $50 per day and that the vendor wants to produce 500 hot dogs per day. The demand for labor is ____.

• A) L = 1,020.4W^-0.3
• B) L = 1,020.4W^-0.7
• C) W = 1,020.4L^-0.3
• D) L = 1,020.4W^0.3

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Definitions:

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Transactions between countries involving the transfer of money and payments for goods and services across borders.

Merchandise Exports

Goods produced domestically and sold to buyers in another country.

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A system where the value of currencies is determined by supply and demand in the foreign exchange market without direct intervention by central banks.

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An agreement established in 1944 which set up an international monetary system based on fixed exchange rates and established the International Monetary Fund (IMF) and the World Bank.