The Production Function for Good X Exhibited in the Table

question 24

Multiple Choice

The production function for good X exhibited in the table below is for the:
$$\begin{array}{l}\text { Production Function far God } \mathbf { X }\\\begin{array} { l l l l l } L ^ { * } & K & Q & M _ { K } = ( \Delta Q / \Delta K ) & \begin{array} { l } \mathbf { M P } _ { K } = ( Q / K ) \\\text { Mverage }\end{array} \\\text { Labor } & \text { Capital } & \text { Output } & \begin{array} { l } \text { Product of } \\\text { Capital }\end{array} & \begin{array} { l } \text { Product of } \\\text { Capital }\end{array} \\9 & 0 & 0 & - & - \\9 & 10 & 57 & 5.7 & 5.70 \\9 & 20 & 324 & 26.7 & 16.20 \\9 & 30 & 657 & 33.3 & \mathbf { B } \\9 & 40 & 1,072 & 41.5 & 26.80 \\9 & 50 & 1,524 & 45.2 & 30.48 \\9 & 60 & 1,976 & 45.2 & 32.93 \\9 & 70 & 2,391 & 41.5 & 34.16 \\9 & 80 & 2,724 & 33.3 & 34.05 \\9 & 90 & 2,991 & \mathbf { A } & 33.23 \\9 & 100 & 3,048 & 5.7 & 30.48 \\9 & 110 & 3,016 & - 3.2 & 27.42 \\9 & 120 & 2,945 & - 7.1 & 24.54\end{array}\end{array}$$

• A) long run, since K is the fixed input.
• B) short run, since L is the fixed input.
• C) long run, since K is the variable input.
• D) short run, since L is the variable input.

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Definitions:

Market Value

The contemporary pricing for transactions involving assets or services on the market.

Stock Split

A corporate action that increases the number of a company's outstanding shares by issuing more shares to current shareholders, thus reducing the price of each share.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Legal Entity

An organization that has legal rights and obligations, including the ability to enter into contracts and own property.