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A Firm with a Production Function Q = KL (Where

Question 32

Multiple Choice

A firm with a production function Q = KL (where K is units of capital and L is units of labor) has an expansion path that is given by K = 2L. The wage rate (W) is $20 and the rental on capital is $10. A firm with a production function Q = KL (where K is units of capital and L is units of labor) has an expansion path that is given by K = 2L. The wage rate (W) is $20 and the rental on capital is $10. Assuming that the firm is using the optimal mix of inputs for any given output level, the total cost when using one unit of labor is $____. A) 160 B) 120 C) 80 D) 40 Assuming that the firm is using the optimal mix of inputs for any given output level, the total cost when using one unit of labor is $____.


A) 160
B) 120
C) 80
D) 40

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