Suppose the Short-Run Production Function Is Q = L⁰

question 45

Multiple Choice

Suppose the short-run production function is q = L^0.5. If the marginal cost of producing the tenth unit is $5, what is the wage per unit of labor?

• A)$1
• B)$0.5
• C)$0.25
• D)It cannot be determined without more information.

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Definitions:

Overhaul

A thorough examination and necessary repair or updates to machinery, systems, or processes to ensure efficient operation.

Installation Costs

Expenses associated with setting up or fitting equipment, machinery, or systems for use, including labor and materials.

Purchase Price

The amount of money paid to buy an asset, security, or other item of value.

Capital Expenditures

Investments in physical assets like equipment, buildings, and property to enhance or acquire new business operations.