Two Firms, Wickedly Efficient Widgets (WEW) and Wildly Nepotistic Widgets

question 21

Multiple Choice

Two firms, Wickedly Efficient Widgets (WEW) and Wildly Nepotistic Widgets (WNW) , both produce widgets with the same production function , where K is the input of capital and L is the input of labor. Each company can hire labor at $1 per unit and capital at $1 per unit. WEW produces 10 widgets per week, choosing its input combination so as to produce these 10 widgets in the cheapest way possible. WNW also produces 10 widgets per week, but its dotty CEO requires it to use twice as much labor as WEW uses. Given that it must use twice as many laborers as WEW does and must produce the same output, how much larger are WNW's total costs than WEW's?

• A) $10 per week
• B) $20 per week
• C) $15 per week
• D) $5 per week
• E) $2 per week

---

Definitions:

Optic Disc

The point on the retina at which the optic nerve fibers exit the eye, creating a blind spot as it contains no photoreceptors.

Blood Vessels

Blood vessels are tubular structures carrying blood throughout the body, including arteries, veins, and capillaries.

Optic Nerve

The nerve responsible for sending visual signals from the retina to the brain.

Glaucoma

A group of eye conditions that damage the optic nerve, often due to abnormally high pressure in the eye, and can lead to blindness if untreated.