Exhibit 11-10 How Low Would the Wage Rate Have

question 47

Multiple Choice

Exhibit 11-10 How low would the wage rate have to fall before the firm in Exhibit 11-9 would hire nine workers?

• A)$198
• B)$4
• C)$396
• D)$28
• E)The firm would have to be paid to hire nine workers.

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Definitions:

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.

High-Low Method

The high-low method is a way of estimating the variable and fixed costs of a business by analyzing the highest and lowest levels of activity and their corresponding costs.

Machine Maintenance

The routine or preventive care given to machinery and equipment to keep them running efficiently and to avoid any unplanned downtime or failures.

Mixed Cost

A cost composed both of variable and fixed elements, where part of the expense varies with the level of output while the rest remains constant.