If the Cobb-Douglas Production Function for a Beer Manufacturer Is

question 20

Multiple Choice

If the Cobb-Douglas production function for a beer manufacturer is q=1.52L⁰.⁶K⁰.⁴.Assume that the firm's capital is fixed at 250 units,the rental rate of capital is $5 per unit,and the wage rate is $10 per hour.The amount of labor needed to produce q units of output is

• A) 0.0124q.
• B) 13.832q⁰.⁶.
• C) 0.0124q¹.⁶⁷.
• D) 13.832q¹.⁶⁷.

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Definitions:

Financial Advantage

A benefit in monetary terms that gives an individual, company, or situation a superior position compared to others.

Outside Supplier

An external company or entity that provides goods or services to another company, often used in the context of manufacturing or production.

Fixed Costs

Expenses that do not change in proportion to the level of production or sales, such as rent, salaries, and insurance premiums.

Selling Price

The cost incurred by the customer for acquiring a product or service.