Suppose the Short-Run Production Function Is Q = L⁰

question 10

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:

Disposable Income

The cash reserves left for households to spend and save after paying income taxes.

Disposable Income

Funds households have for saving and spending following the deduction of income taxes.

Disposable Income

Disposable income for households after accounting for income taxes, meant for spending and saving.

Marginal Propensity

The ratio of change in an economic variable, such as consumption or saving, to a change in another variable, like income.