Suppose That in the Short Run, the Firm Which Has

question 11

Multiple Choice

Suppose that in the short run, the firm which has production function F(L, M) = 4L^1/2M^1/2 must use 4 machines.If the cost of labor is $10 per unit and the cost of machines is $6 per unit, the short-run total cost of producing 64 units of output is

• A)$512.
• B)$384.
• C)$640.
• D)$1,328.
• E)$664.

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Definitions:

Simple Rate of Interest

Interest calculated only on the principal amount of a loan or deposit, without compounding.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically used for the financing of payroll, accounts payable, inventories, and meeting other short-term liabilities.

Price

The amount of money required to purchase a good, service, or asset.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment's cost.