Assume That in Table 30

question 124

Multiple Choice

$$\begin{array}{l}\begin{array} { c c c c } \text { Output (units) } & \text { Labor (units) } & \text { Output (units) } & \text { Capital (units) } \\10 & 1 & 20 & 1 \\26 & 2 & 56 & 2 \\38 & 3 & 86 & 3\end{array}\\\text { Table 30.5 }\end{array}$$ Assume that in Table 30.5 the cost of labor is $4 per unit and the cost of capital is $6 per unit.In Table 30.5, what is the cost efficiency of the second unit of capital?

• A) 6 units per $1 of cost.
• B) 36 units per $1 of cost.
• C) 56 units per $1 of cost.
• D) 9.33 units per $1 of cost.

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Definitions:

Rationality

The quality of being based on or in accordance with reason or logic; often involves making decisions that are optimal based on available information.

Neoclassical Economic Models

These models are based on the assumptions of rational behavior and efficient markets, focusing on how supply and demand determine prices and allocate resources.

Determinants

Determinants are factors or elements that cause something to happen or significantly influence the outcome of a process or situation.

Market Prices

The current prices at which goods and services can be bought or sold in a marketplace.