In the Short Run, a Firm Which Has Production Function

question 35

Multiple Choice

In the short run, a firm which has production function f(L, M) =4L^1/2M^1/2 must use 4 machines.If the cost of labor is $4 per unit and the cost of machines is $10 per unit, the short-run total cost of producing 72 units of output is

• A)$504.
• B)$288.
• C)$720.
• D)$728.
• E)$364.

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Definitions:

Money Purchase Plan

A type of defined-contribution retirement plan in which the employer's annual contributions are fixed and determined by formula.

Flexible Spending Account Plan

A benefit plan that allows employees to set aside pre-tax dollars for eligible expenses, such as medical or dependent care expenses.

Employee Retirement Income Security Act

The Employee Retirement Income Security Act (ERISA) is a federal law that sets minimum standards for retirement and health benefit plans in private industry to protect individuals in these plans.

Pension Plan Trustees

Individuals or a group of individuals who hold responsibility for managing and overseeing the assets and operation of a pension fund.