A Firm's Production Function Is Given by

question 29

Multiple Choice

A firm's production function is given by .The marginal products of labor and capital are,respectively, and .Further,the wage rate is and the rental rate of capital is .What is the most efficient combination of labor and capital that also results in a total cost level of exactly $1,200?

• A) (20, 50)
• B) (25, 47.5)
• C) (30, 45)
• D) (40, 40)

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Definitions:

Inventory

The total amount of goods or materials a business has in stock, potentially for sale or production.

Outlived Usefulness

Refers to an asset or item that has exceeded its functional or strategic value to an organization or individual.

Aging Accounts Receivable

A method of managing accounts receivable by categorizing them according to the length of time an invoice has been outstanding.

Present Value

The current value of a future amount of money or stream of cash flows, given a specified rate of return.