In an Economy with Production Function Y = 1

question 50

Multiple Choice

In an economy with production function Y = 1.5 × ,K = 343,and L = 512.If factor markets are in equilibrium,then the rental price of capital is (approximately) ________,and the real wage is (approximately) ________.

• A)0.5;0.8
• B)7;8
• C)0.9;1.35
• D)1.4;0.4
• E)0.6;0.9

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Definitions:

Markup Percentage

A measure of the difference between the cost of a product and its selling price, expressed as a percentage of the cost.

Product Cost

The total costs incurred in the production of a product, typically including direct materials, direct labor, and manufacturing overhead.

Target Cost

The desired cost of a product that is determined by subtracting a desired profit margin from a competitive market price.

Product Cost Concept

The idea that all costs incurred to create a product, including direct labor, materials, and manufacturing overhead, are assigned to products.