Cost of Production The Following Questions Refer to the Diagram Below. the Wage

question 21

Multiple Choice

Cost of Production

The following questions refer to the diagram below. The wage rate is assumed to be $12 per hour, the rental rate is assumed to be $6 per hour, and capital is assumed to be fixed in the short run at 10 hours.



-Refer to Cost of Production.The short-run average cost of producing 60 units of output per week is

• A) $3 per unit.
• B) $4.50 per unit.
• C) $5 per unit.
• D) $9 per unit.

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Definitions:

Guaranteed Payment

A fixed payment made to a partner by a partnership, independent of the partnership's profitability.

Cash Distribution

The payment of earnings, interest, or dividends in cash to shareholders or partners by a corporation, partnership, or other entity.

Liquidating Distribution

A payment made by a corporation to its shareholders during its dissolution, distributing its assets to the owners according to their ownership share.

Basis

The amount paid for an asset, used to determine gain or loss for tax purposes upon sale or other disposition.