Two Firms, Wickedly Efficient Widgets (WEW)and Wildly Nepotistic Widgets (WNW)

question 73

Multiple Choice

Two firms, Wickedly Efficient Widgets (WEW) and Wildly Nepotistic Widgets (WNW) , both produce widgets, using the same production function y = K^1/2L^1/2, where K is the amount of labor used and L is the amount of capital used.Each company can hire labor at $1 per unit of labor and capital at $9 per unit.Each company produces 90 widgets per week.WEW chooses its input combinations to produce in the cheapest way possible.Although it produces the same output per week as WEW, WNW is required by its dotty CEO to use twice as much labor as WEW.How much higher are WNW's total costs per week than WEW's?

• A)$270
• B)$67.50
• C)$275
• D)$135
• E)$132

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Definitions:

Retrieval

The process of accessing and bringing into consciousness information stored in memory.

Stored Information

Data or knowledge retained in the mind or in digital/formal systems for future use.

Consciousness

A concept with many meanings, including sensory awareness of the world outside, direct inner awareness of one’s thoughts and feelings, personal unity, and the waking state.

Long-Term Memory

Long-term memory is the component of the memory system capable of storing large amounts of information for periods ranging from days to a lifetime.