Suppose That a Firm's Production Function of Output Q Is

question 8

Multiple Choice

Suppose that a firm's production function of output Q is a function of only two inputs, labor (L) and capital (K) and can be written Q = 25LK with marginal products MP_L = 25K and MP_K = 25L. Let the wage rate for labor be w = 1 and the rental rate of capital be r= 1. If the firm produces 100 units of output, how many units of labor will it use?

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

Total Quality Management

A management approach focused on continuous improvement of processes, products, and services to enhance customer satisfaction.

Customer Expectations

The set of beliefs or standards that customers hold regarding the future performance and delivery of products and services.

Dispatching

The process of sending goods or transporting them to an intended destination.

Work Release

A program that allows prisoners to work in the general community during the day while continuing to serve their sentence.