Suppose the Production Function Is Given by Q = 2K

question 76

Multiple Choice

Suppose the production function is given by Q = 2K + L.If w = $4 and r = $4, how many units of K and L will be utilized in the production process?

• A)All K and no L.
• B)All L and no K.
• C)Equal amounts of K and L.
• D)A combination of K and L no represented above.

---

Definitions:

Allocative Efficiency

A state of the economy where resources are distributed according to consumer preferences in a way that maximizes overall welfare.

Productive Efficiency

A situation in which an economy or a production process can no longer produce more of one good without sacrificing the production of another good and occurs at any point on the production possibility frontier.

Product Variety

The range of different products or services offered by a company or available in a market.

Benefits

Advantages or positive outcomes that result from actions, policies, or products.