The Following Graph Shows the Marginal and Average Product Curves

question 103

Multiple Choice

The following graph shows the marginal and average product curves for labor,the firm's only variable input.The monthly wage for labor is $2,800.Fixed cost is $160,000. When the firm uses 120 units of labor,what is its AVC at this output?

• A)$40
• B)$70
• C)$60
• D)$56
• E)none of the above

---

Definitions:

Dependent Variable

A variable in scientific research or statistical modeling that is expected to change or respond when another variable (the independent variable) is altered.

Independent Variable

In an experiment, it is the variable that is manipulated or changed to observe its effects on the dependent variable.

Residual Analysis

The analysis of the residuals used to determine whether the assumptions made about the regression model appear to be valid. Residual analysis is also used to identify outliers and influential observations.

Regression Model

A statistical technique used to estimate the relationship between a dependent variable and one or more independent variables.