Question

Table: Labor and Output

Quantity of Labor (workers)	Quantity of soybeans (bushels)
0	0
1	25
2	45
3	60
4	70
5	75

Reference: Ref 11-10 Table: Production Function for Soybeans

(Table: Production Function for Soybeans) Use Table: Production Function for Soybeans. Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day. The cost of labor is $100 per worker per day. The total cost of producing 75 bushels of soybeans is:

Select one:

a. $1,150.

b. $650.

c. $7,650.

d. $1,225.

Answer 1

Ans - ( B)

We need 5 workers to produce 75 bushels of soyabean. So cost of labor is 500. Remaining 150 dollars cost will be incurred for capital and tractor.

So , total cost is 500+150 = 650