In the Short Run, a Firm Which Has Production Function

question 43

Multiple Choice

In the short run, a firm which has production function f(L, M) =4L^1/2M^1/2 must use 4 machines.If the cost of labor is $4 per unit and the cost of machines is $4 per unit, the short-run total cost of producing 48 units of output is

• A)$192.
• B)$196.
• C)$198.
• D)$320.
• E)$160.

---

Definitions:

Preferred Stock

A type of stock that provides dividends before any dividends are provided to common stockholders, often with fixed rates.

Par Value

The face value of a bond or stock, as specified by the issuing company, which does not necessarily reflect its market value.

Legal Capital

The minimum amount of capital that a company is required to maintain for the protection of its creditors.

Stockholders

Individuals or entities that own shares in a corporation, giving them various rights including a claim on part of the company's profits in the form of dividends.