Suppose a Production Function for a Firm Takes the Following

question 132

Multiple Choice

Suppose a production function for a firm takes the following algebraic form: Q = (0.5) KL - 40L,where Q is the output of paintbrushes per week.Now suppose the firm is operating with 100 units of capital (K = 100) and 30 000 units of labour (L = 30 000) .What is the output of paintbrushes per week?

• A)30 000
• B)300 000
• C)1 200 000
• D)1 500 000
• E)3 000 000

---

Definitions:

Work In Process Inventory

Represents partially finished goods that are in the production process at a given time, between raw materials and finished goods.

Process Operation

The stages or steps taken in a manufacturing or service delivery process, often involving the transformation of materials or information.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into the equivalent of a full finished good for inventory valuation.

Direct Materials

Raw materials that can be directly traced to the production of a specific product.