Suppose That Production for Good X Is Characterized by the Following

question 176

Multiple Choice

Suppose that production for good X is characterized by the following production function,Q = 4K^0.5L^0.5,where K is the fixed input in the short run.If the per-unit rental rate of capital,r,is $86.80 and the per-unit wage,w,is $20,then the average total cost of using 25 units of capital and 49 units of labor is:

• A) $5.25.
• B) $22.50.
• C) $31.00.
• D) There is insufficient information to determine the average total costs.

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Definitions:

Density

A measure of how much mass is contained in a given unit volume of a substance.

Volume

The size of the space covered by an object or a substance.

Density

A physical property that denotes the mass of a substance per unit volume.

Volume

The space occupied by an object or substance, or encased within a holding device.