The Acme Company Is a Perfect Competitor in Its Input

question 37

Multiple Choice

The Acme Company is a perfect competitor in its input markets and its output market. Its average product of labor is 30, the marginal product of labor is 20, the price of labor is $20, and the price of the output is $5. For Acme Company, the marginal revenue product of labor:

• A) is $100.
• B) is $150.
• C) is $400.
• D) is $600.
• E) cannot be determined with the information provided.

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Definitions:

Risk Premiums

Additional returns demanded by investors for taking on higher risk, varying according to the perceived risk of the investment.

Probability Distribution

A function in statistics that enumerates all conceivable values and their associated probabilities for a random variable within a predetermined range.

Variance

A measure of the dispersion or spread of a set of values, indicating how much the numbers in the set differ from the mean.

Diversifiable Risk

A risk that can be reduced or eliminated from a portfolio through diversification, not linked to the market's movements as a whole.