The Following Data Show the Total Output for a Firm

question 111

Multiple Choice

The following data show the total output for a firm when different amounts of labour are combined with a fixed amount of capital.Assume that the wage per unit of labour is $10 and the cost of the capital is $50. $$\begin{array} { | c | l | } \hline \text { Lab our per period } & \text { Total output per period } \\\hline 0 & 0 \\\hline 1 & 10 \\\hline 2 & 30 \\\hline 3 & 90 \\\hline 4 & 132 \\\hline 5 & 150 \\\hline\end{array}$$ TABLE 7- 3
-Consider a basket- producing firm with fixed capital.If the firm can produce 24 baskets per day with 3 workers and then increases production to 36 baskets per day with 4 workers,then which of the following statements is definitely true?

• A)The firm has passed the point of diminishing average productivity.
• B)With 4 workers,the average product is greater than the marginal product.
• C)The firm has passed the point of diminishing marginal productivity.
• D)With 4 workers,the marginal product is greater than the average product.
• E)The marginal productivity of the fourth worker is 9.

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