Suppose the Production of Paved Roadways Can Be Represented as Q

question 19

Multiple Choice

Suppose the production of paved roadways can be represented as q = L⁰.⁵ + K⁰.⁵.Which of the following statements is (are) TRUE?

• A) Labor is subject to diminishing marginal productivity in the short run.
• B) Labor and capital are imperfect substitutes.
• C) The isoquants for paved roadways are convex.
• D) All of the above.

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Definitions:

Costs

The monetary value incurred to produce goods or services, including direct expenses, indirect expenses, and overheads affecting a company's profitability.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding the costs of producing goods sold (COGS); includes expenses like rent, utilities, and salaries.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the consumption or wear and tear of the asset.

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, often assessed for financial health and performance.