Suppose That in the Short Run, the Firm in Problem

question 3

Multiple Choice

Suppose that in the short run, the firm in Problem 3 which has production function F(L, M) must use 4 machines. If the cost of labor is $10 per unit and the cost of machines is $6 per unit, the short-run total cost of producing 64 units of output is

• A) $512.
• B) $384.
• C) $640.
• D) $1,328.
• E) $664.

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Definitions:

Factory Building

A structure designated for industrial activities including manufacturing, assembling, and processing.

Income Statement

is a financial statement that provides a summary of a company's revenues, expenses, and profits over a specified period of time, showing how the net income is arrived at.

Operating Expenses

Expenses incurred during the regular operations of a business, excluding the cost of goods sold.

Cost of Goods Sold

The expenses directly linked to the manufacturing of the products a company sells, such as costs for materials and labor.