In Problem 1, the Production Function Is Given by F(L)

question 15

Multiple Choice

In Problem 1, the production function is given by F(L) . Suppose that the cost per unit of labor is $12 and the price of output is 12, how many units of labor will the firm hire?

• A) 32
• B) 192
• C) 64
• D) 128
• E) None of the above.

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Definitions:

Consumer Price Index

A metric that calculates the mean fluctuation in costs over time for a collection of consumer goods and services, as paid by urban buyers.

Real Wages

The purchasing power of an individual's earnings, taking into account inflation, which determines the amount of goods and services that can be bought.

Base Year

A specific year against which the real value of economic indicators is measured, allowing for comparison over time.

Percentage Changed

The amount, expressed as a percentage, that a value has increased or decreased compared to a previous value.