The UJava Espresso Stand Needs Two Inputs, Labor and Coffee

question 7

Multiple Choice

The UJava espresso stand needs two inputs, labor and coffee beans, to produce its only output, espresso.Producing an espresso always requires the same amount of coffee beans and the same amount of time.Which of the following production functions would appropriately describe the production process at UJava, where B represents ounces of coffee beans, and L represents hours of labor?

• A)Q = 0.5B + 0.5L^0.5.
• B)Q =B^0.80L^0.20.
• C)Q = min(2B, 60L).
• D)Q = B/2 + L/30.
• E)None of the above.

---

Definitions:

Capital Balance

The Capital Balance represents the amount of money that owners have invested in a business minus any withdrawals. It indicates the financial stake of the owners in the business.

Profits and Losses

Financial gains or deficits that a business experiences, typically shown in an income statement.

Invests

Invests pertains to the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.

Capital Account

A financial statement that shows the changes in a company’s equity throughout a period, from investments, withdrawals, and net income.