Exhibit 22-14 Assume That Labor Is the Only Variable Input

question 130

Multiple Choice

Exhibit 22-14

Assume that labor is the only variable input.
-Refer to Exhibit 22-14.What is the marginal cost of producing this good with 3 and 4 laborers working [blanks (G) and (H) ],respectively?

• A) $200; $150
• B) $60; $30
• C) $12; $40
• D) $6; $8
• E) none of the above

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Definitions:

Book Value

The value of a company's asset as it appears on the balance sheet, calculated by subtracting the asset's accumulated depreciation from its cost.

Fair Market Value

The price at which an asset would sell in the market under conditions of fair competition and sufficient information.

Productive Facilities

Physical locations such as factories or offices where economic goods are produced or services are provided, utilizing labor, machinery, and equipment.

Land Improvements

Enhancements to a plot of land such as landscaping, parking lots, and fences that add value but are subject to depreciation.