Final answer:
The question relates to the production function Y = F(K) in economics and asks how much output is produced with a given amount of capital. Since no specific relationship between capital and output is provided, the number of units produced is indeterminate, making answer D) the correct choice.
Step-by-step explanation:
The question concerns a production function in an economy, which is a concept studied within the field of Economics. Specifically, it deals with the relationship between inputs used in the production of goods and services (in this case, capital) and the resulting output. The underlying principle is that in the short run, some factors of production, like capital, are fixed, which means that adding more labor won't necessarily result in a proportional increase in output.
When the question states that an economy with a production function Y = F(K) has 400 units of capital, it implies that there are no other factors contributing to the production function, such as labor (L). This is a theoretical scenario meant to understand the effect of capital on output. However, without a given formula that explains how capital (K) is transformed into output (Y), it's impossible to determine the exact number of units produced. Therefore, the correct answer is D) An indeterminate number of units.
This principle can be illustrated using examples from different business scenarios. For instance, a secretarial firm using typists (labor) and personal computers (capital) may find that their output is limited by the number of PCs available in the short turn. Similarly, a lumberjack operation with a fixed number of saws will only be able to cut down a certain number of trees per day, regardless of how many lumberjacks are employed, until more capital is introduced.