If Labor Produces Output According to Q = 8L^1/2,labor Costs

question 16

Multiple Choice

If labor produces output according to Q = 8L^1/2,labor costs $10,and output sells for $100,then the optimal level of L is:

• A) 8.
• B) 16.
• C) 1,600.
• D) 2.
• E) 10.

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Definitions:

Centralized

A system or organization where decision-making and administrative processes are concentrated at a single point or center.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured as the percentage increase in real GDP.

Production Possibility Frontier

A graph showing all the highest production options for two or more products, considering a certain amount of resources.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than others.