If Output Is Produced According to Q = 4L

question 45

Multiple Choice

If output is produced according to Q = 4L + 6K, the price of K is $12, and the price of L is $20, then the cost-minimizing combination of K and L capable of producing 96 units of output is

• A) L = 20 and K = 12.
• B) L = 0 and K = 16.
• C) L = 24 and K = 16.
• D) L = 12 and K = 8.
• E) L = 24 and K = 0.

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Definitions:

Collateral

An asset or property that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Coupon Interest Rate

The annual interest rate paid on a bond or fixed-income security, expressed as a percentage of the face value.

Carrying Amount

Also known as book value, this represents the value of an asset as recorded in the company's books, accounting for depreciation and amortization.

Face Value

The nominal value or original monetary value printed on a security or currency note.