$$\begin{array}{l}
\begin{array} { c c c c }
\text { Output (units) } & \text { Labor (units) } & \text { Output (units) } & \text { Capital (units) } \
10 & 1 & 20 & 1 \
26 & 2 & 56 & 2 \
38 & 3 & 86 & 3
\end{array}\
\text { Table 30.5 }
\end{array}$$ Assume that in Table 30.5 the cost of labor is $4 per unit and the cost of capital is $6 per unit.In Table 30.5, what is the cost efficiency of the second unit of capital?
A) 6 units per $1 of cost.
B) 36 units per $1 of cost.
C) 56 units per $1 of cost.
D) 9.33 units per $1 of cost.

Question

$$\begin{array}{l}
\begin{array} { c c c c } 
\text { Output (units) } & \text { Labor (units) } & \text { Output (units) } & \text { Capital (units) } \
10 & 1 & 20 & 1 \
26 & 2 & 56 & 2 \
38 & 3 & 86 & 3
\end{array}\
\text { Table 30.5 }
\end{array}$$ Assume that in Table 30.5 the cost of labor is $4 per unit and the cost of capital is $6 per unit.In Table 30.5, what is the cost efficiency of the second unit of capital?
A) 6 units per $1 of cost.
B) 36 units per $1 of cost.
C) 56 units per $1 of cost.
D) 9.33 units per $1 of cost.

Quizplus · Accepted Answer

The cost efficiency of the second unit of capital is calculated by dividing the additional output generated by the second unit of capital by its cost. The additional output generated by the second unit of capital is 56 - 20 = 36 units. The cost of one unit of capital is $6. Therefore, the cost efficiency is 36 units / $6 = 6 units per $1 of cost.

Assume That in Table 30