The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy:

-If the price of each input is $5,the per unit cost of production in the above economy is:
A) $5
B) $2.75.
C) $2.50.
D) $.40.

Question

The following table gives information about the relationship between input quantities and real domestic output in a hypothetical economy:
 
-If the price of each input is $5,the per unit cost of production in the above economy is:
A) $5 
B) $2.75. 
C) $2.50. 
D) $.40.

Quizplus · Accepted Answer

The per unit cost of production can be calculated by dividing total input cost by total output. Total input cost is the sum of product of each input with its price. 
Total input cost = (10*$5) + (8*$5) + (6*$5) + (4*$5) = $120
Total output = 20
Per unit cost of production = $120/20 = $6
Therefore, the per unit cost of production in the above economy is $6.

The Following Table Gives Information About the Relationship Between Input