Touchie McFeelie from Your Workbook Has a Production Function (0

question 45

Multiple Choice

Touchie McFeelie from your workbook has a production function (0.1) J^1/2 J^3/4, where J is the number of old jokes used and L is the number of hours of cartoonists' labor.Touchie is stuck with 400 old jokes for which he paid 4 dollars each.If the hourly wage rate for cartoonists is 5 dollars, then the total cost of producing 16 comics books is

• A)1,680 dollars.
• B)840 dollars.
• C)2,520 dollars.
• D)1,696 dollars.
• E)420 dollars.

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Definitions:

Heckscher-Ohlin Theory

An economic theory that suggests countries export what they can most efficiently and abundantly produce, based on factors of production like land, labor, and capital.

Absolute Advantage

The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that good or service.

Comparative Advantage

The skill of an entity, whether a person, corporation, or country, to create a product or service with smaller opportunity costs than its competition.

Absolute Advantage

Absolute advantage is the ability of a country or entity to produce a good or service more efficiently than others, using fewer resources.