Question : 21) The equation Q = 0.5KL – (0.4)L + 2L2 : 1384196

21) The equation Q = 0.5KL – (0.4)L + 2L2 is an example of

A) a factor of production equation.

B) an economic input function.

C) a technological change equation.

D) an arithmetic expression of output quantities.

E) a production function.

22) Suppose a production function for a firm takes the following algebraic form: Q = 2KL – (0.2)L2, where Q is the output of sweaters per day. Now suppose the firm is operating with 8 units of capital (K=8) and 10 units of labour (L=10). What is the output of sweaters?

A) 30 sweaters per day

B) 60 sweaters per day

C) 80 sweaters per day

D) 140 sweaters per day

E) 155 sweaters per day

23) Suppose a production function for a firm takes the following algebraic form: Q = (0.5)KL – 40L, where Q is the output of paintbrushes per week. Now suppose the firm is operating with 100 units of capital (K = 100) and 30 000 units of labour (L = 30 000). What is the output of paintbrushes per week?

A) 30 000

B) 300 000

C) 1 200 000

D) 1 500 000

E) 3 000 000

24) Suppose a production function for a firm takes the following algebraic form: Q = (0.25)K × (1.5), where Q is the output of garage doors produced per month. Now suppose the firm is operating with 10 units of capital (K = 10) and 8 units of labour (L = 8). What is the output of garage doors per month?

A) 24

B) 240

C) 300

D) 2400

E) 3000

25) The opportunity cost of any factor of production is

A) its accounting cost.

B) the money actually paid to the factors of production.

C) the benefit forgone by not using it in its worst alternative.

D) the benefit forgone by not using it in its best alternative.

E) its explicit cost.

26) The choices listed below involve costs to the firm. For which is the implicit cost potentially different than its explicit cost?

A) The use of firm-owned assets.

B) The services of hired workers.

C) The use of rented land.

D) The interest paid on borrowed money.

E) The purchase of raw materials used in production.

27) The opportunity cost to a firm of using an asset is zero if

A) the asset is already owned by the firm.

B) no money was spent to acquire the asset.

C) the asset has no alternative uses.

D) the asset has zero sunk costs associated with it.

E) the asset was given to the firm for free.

28) The opportunity cost of money that a firm’s owner has invested in the firm is an example of

A) direct production costs.

B) accounting costs.

C) sunk costs.

D) implicit costs.

E) explicit costs.

29) If a firm uses factor inputs that are personally owned by the firm’s owner, then economists refer to the opportunity cost of these inputs as

A) direct production costs.

B) accounting costs.

C) sunk costs.

D) implicit costs.

E) inverted costs.

30) Economic profits are less than accounting profits because the calculation of economic profit

A) includes an amount for depreciation.

B) includes an explicit charge for risk taking.

C) includes the implicit charges for the use of capital owned by the firm and for risk taking.

D) includes the implicit charges for the use of capital owned by the firm and for income taxes.

E) is stipulated in regulations set forth by the Canada Revenue Agency.