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-(Table: Production Function for Soybeans) Look at the 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 variable cost of producing 45 bushels of soybeans is:
A) $100.
B) $200.
C) $350.
D) $4,500.

Question

Use the following to answer questions: 
-(Table: Production Function for Soybeans) Look at the 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 variable cost of producing 45 bushels of soybeans is:
A) $100. 
B) $200. 
C) $350. 
D) $4,500.

Quizplus · Accepted Answer

The variable cost is the cost of labor. To produce 45 bushels, 2 workers are needed (as per the table). Therefore, the variable cost is 2 workers * $100 per worker = $200.

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