Suppose That a New Alloy Is Invented Which Uses Copper

question 25

Multiple Choice

suppose that a new alloy is invented which uses copper and zinc in fixed proportions where 1 unit of output requires 3 units of copper and 3 units of zinc for each unit of alloy produced.If no other inputs are needed, the price of copper is $4, and the price of zinc is $5, what is the average cost per unit when 4,000 units of the alloy are produced?

• A)$1.33
• B)$14.17
• C)$1,333.33
• D)$27
• E)$14,166.67

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Definitions:

Discount Rate

The interest rate charged to commercial banks and other financial institutions for the loans they take from the Federal Reserve's discount window.

Future Cash Flows

Future cash flows refer to the projected financial gains or expenses a business expects to receive or pay out over a specific period in the future.

Discounted Payback Period

The time required to recover the cost of an investment while considering the time value of money.

Initial Investment

The amount of money used to start an investment project or venture.