An economy is employing 4 units of capital, 5 units of raw materials, and 4 units of labor to produce its total output of 360 units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3. The per-unit cost of production in this economy is

$0.20

Explanation:

Calculation to determine what The per-unit cost of production in this economy is

First step is calculate the Capital, Raw materials and Labour

Capital=4*$10

Capital=$40

Raw materials=5*$4

Raw materials=$20

Labour=4*$3

Labour=$12

Second step is calculate the Total cost

Total cost=$40+$20+$12

Total cost=$72

Now let calculate the Cost per unit using this formula

Cost per unit= Total cost/Total units produced

Let plug in the formula

Cost per unit=$72/360

Cost per unit=$0.20

Therefore The per-unit cost of production in this economy is $0.20

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