The Production Function Is F (L, M) = 4

question 6

Multiple Choice

The production function is f (L, M) = 4 , where L is the number of units of labor and M is the number of machines. If the amounts of both factors can be varied and if the cost of labor is $64 per unit and the cost of using machines is $1 per machine, then the total cost of producing 20 units of output is

• A) $80.
• B) $650.
• C) $20.
• D) $320.
• E) $40.

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Definitions:

Unobtrusive Measures

Methods of collecting data that do not interfere with the subjects being studied.

Reactivity

Reactivity is the tendency of people to alter their performance or behavior due to the awareness that they are being observed.

Reactivity

The phenomenon where subjects alter their behavior due to their awareness of being observed.

Convergent Validity

A measure of the extent to which two independent measures of the same concept are correlated.