Suppose That the Firm's Only Variable Input Is Labor

question 64

Multiple Choice

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.Suppose that installation of a new assembly line increases the output produced per worker.The cost per unit of output

• A)will increase.
• B)will decrease.
• C)will be unchanged.
• D)is at its maximum.
• E)is at its minimum

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Definitions:

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its separate net assets, representing aspects like brand reputation, customer loyalty, and other non-physical assets.

Balance Sheet

A balance sheet is a financial statement that provides a snapshot of a company's financial condition at a specific point in time, detailing assets, liabilities, and shareholders' equity.

Long-Term Investments

Assets held by a company for a period exceeding one year, intended to bring a return on the investment over time.

Common Stock

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.