Question

an economy is employing 2 units of capital, 5 units of raw materials, and 8 units of labour to produce its total output of 640 units. each unit of capital costs $10, each unit of raw materials, $4, and each unit of labour, $3. refer to the above information. the per unit cost of production in this economy is: multiple choice $1.00. $.05. $.10. $.50.

Answer 1

The per unit cost of production in this economy is $0.10.

Step-by-step explanation:

In this economy, there are 2 units of capital, 5 units of raw materials, and 8 units of labor producing a total output of 640 units. The cost per unit of capital is $10, the cost per unit of raw materials is $4, and the cost per unit of labor is $3. To find the per unit cost of production, we add up the cost of capital, raw materials, and labor, and divide it by the total output.

Cost of capital = 2 units x $10 = $20

Cost of raw materials = 5 units x $4 = $20

Cost of labor = 8 units x $3 = $24

Total cost of production = $20 + $20 + $24 = $64

Per unit cost of production = Total cost of production / Total output = $64 / 640 units = $0.10 per unit