Suppose That an Economy Produces 500 Units of Output

question 121

Multiple Choice

Suppose that an economy produces 500 units of output. It takes 10 units of labor at $15 a unit and 4 units of capital at $50 a unit to produce this amount of output. The per unit cost of production is

• A) $1.42.
• B) $1.24.
• C) $0.70.
• D) $0.40.

---

Definitions:

Experimental Control

Eliminating the influence of an extraneous variable on the outcome of an experiment by keeping the variable constant in the experimental and control groups.

Spurious Relationship

A false association between two variables that appears to be causally linked but is actually due to an extraneous variable.

Nonexperimental Method

Use of measurement of variables to determine whether variables are related to one another. Also called correlational method.

Nonexperimental Method

A research method where the researcher observes and records behavior without manipulating any variables.