The Cobb-Douglas Production Function for an Automobile Manufacturer Is $f ( x , y ) = 100 x ^ { 0.6 } y ^ { 0.4 }$

question 28

Multiple Choice

The Cobb-Douglas production function for an automobile manufacturer is $f ( x , y ) = 100 x ^ { 0.6 } y ^ { 0.4 }$ where x is the number of units of labor and y is the number of units of capital. Estimate the average production level if the number of units of labor x varies between 250 and 300 and the number of units of capital y varies between 250 and 300.

• A)20.99
• B)21.10
• C)10.99
• D)31.44
• E)31.24

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Definitions:

Finished Goods Inventory

Unsold inventory of products that are ready for the market.

Raw Materials Inventory

The total cost of all components and materials held by a company that are intended to be used in the production process.

Budgeted Cost

An estimate of the financial expenditure for a particular operation, project, or production process over a set period.

Raw Materials

Basic substances or components that are processed or transformed into a finished product.