Suppose the Production Function Is Given by Q = K^1/2L^1/2,and

question 83

Multiple Choice

Suppose the production function is given by Q = K^1/2L^1/2,and that Q = 30 and K = 25.How much labor is employed by the firm?

• A) 49
• B) 6
• C) 36
• D) 25

---

Definitions:

Unit Product Cost

The combined sum of fixed and variable expenses incurred in the creation of one unit of a product.

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Total Gross Margin

The difference between the sales revenue and the cost of goods sold, indicating the total profitability from goods sold.

Absorption Costing

A pricing approach that encompasses all costs related to production - including direct materials, direct labor, as well as both variable and fixed overhead expenses - within the product’s cost.