The Wilson Corporation Produces Output According to Q = 4(KL)^1/2,where

question 9

Multiple Choice

The Wilson Corporation produces output according to Q = 4(KL) ^1/2,where K is the amount of capital used and L is the amount of labor employed.If capital costs $2 per unit and labor costs $8 per unit,Wilson's minimized long-run average total cost is:

• A) $2.
• B) $2Q.
• C) $10.
• D) $10Q.
• E) $22.

Define and calculate price elasticity of demand for various products and understand its implications.

Understand the concept of cross-price elasticity of demand and how it reflects the relationship between substitutes and complements.

Realize the significance of income elasticity of demand and how it differs in the short and long run for various goods and services.

Interpret economic figures and graphs related to supply and demand in different time frames (short run, intermediate run, long run).

---

Definitions:

Direct Method

A costing method primarily used in cost accounting that allocates service department costs directly to production departments without any intermediate allocations.

Prepaid Expense

Payments made for goods or services to be received in the future, considered as an asset on the balance sheet until used or consumed.

Accrued Liabilities

Obligations that a company has incurred, for which it has not yet paid cash or issued payment during the accounting period.

Direct Method

An approach in cost accounting used to allocate service department costs directly to producing departments without distributing service costs between service departments.