# If output is produced according to Q

### If output is produced according to Q

11. If output is produced according to Q = 5Lk (L is the quantity of labor and k is the quantity of capital), the price of K is $12, and the price of L is $6, then the cost minimizing combination of K and L capable of producing 4,000 units of output is

A. L = 25 and k = 32.

B. L = 30 and k = 26.67.

C. L = 10 and k = 80.

D. L = 20 and k = 40.

E. L = 40 and k = 20.

12. Hilltop Corporation has the following total function TC= Q^{2} + 120 Q + 400. The level of output where average cost is minimized for Hilltop Corp. is

A. 40.

B. 20.

C. 30.

D. 10.

E. 15.

18. If elasticity of demand is -2, marginal cost is 4, and average cost is 6, a profit maximizing markup price is

A. 4.

B. 6.

C. 8.

D. 10.

E. 12.

21. A firm has a division which produces chemical Y, whose average total costs are

ATC = 50 + 2Q (where Q is the quantity of Y), and a marketing division which adds its own average total costs of ATC = 20 + 3Q. There is no external market price of Y. The transfer price of Y should be

A. $50.

B. $4Q.

C. $50 + 4Q.

D. $2Q.

E. $5Q.