The Production Function for Laser Eye Surgery Is Given by Q

question 76

Multiple Choice

The production function for laser eye surgery is given by Q = 20K^0.5L^0.5, where Q is the number of laser eye surgeries performed per day, K is the number of eye surgery machines (which is fixed at 2 in the short run) , and L is the number of employees. The marginal product of labor for L = 3 is ____.

• A) 28.28
• B) 11.71
• C) 9.43
• D) 8.99

---

Definitions:

Direct Method

An approach to preparing the cash flow statement where actual cash flows from operating activities are listed.

Lower of Cost

An accounting rule where inventory is recorded at the lower of either its acquisition cost or market value at reporting time.

Allowance Method

An accounting technique used to estimate and account for doubtful debts, reducing accounts receivable to a realistic amount.

Direct Method

A way of presenting the cash flow statement where actual cash flows from operating activities are listed directly.