Only Two Resources, Capital and Labor, Are Used in an Economy

question 142

Multiple Choice

Only two resources, capital and labor, are used in an economy to produce an output of 600 million units. If the total cost of capital resources is $300 million and the total cost of labor resources is
$100 million, then the per-unit production costs in this economy are

• A) $0.67.
• B) $1.50.
• C) $2.00.
• D) $3.00.

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Definitions:

Strategic Behavior

Actions taken by a firm that attempt to influence the future behavior of other firms.

Cartel

An alliance of firms that coordinate their actions to control the supply of a product or service, thus influencing the market price.

Marginal Cost

The hike in total costs linked to the creation of one more unit of a product or service.

Antitrust Legislation

Laws designed to promote market competition by regulating anti-competitive conduct by companies.