Consider a House-Construction Firm with Fixed Capital

question 99

Multiple Choice

Consider a house-construction firm with fixed capital.The firm can build 8 houses per year with 16 workers and 8.8 houses per year with 17 workers.If it is currently building 8.8 houses per year,which of the following is true?

• A)Average product is at a maximum with 16 workers.
• B)Average product is at a maximum with 17 workers.
• C)The marginal product is below the average product.
• D)The firm has already passed the point of diminishing marginal productivity.
• E)The firm has not yet reached the point of diminishing average productivity.

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Definitions:

Calculating Interest

Calculating interest involves determining the amount of interest earned or paid on a financial asset or liability over a specific period, typically using the principal amount, rate, and time.

Journalize Entries

The process of recording financial transactions in a company's journal, a step in the accounting cycle that leads to the preparation of financial statements.

Voucher System

A set of procedures for authorizing and recording liabilities and cash payments.

Internal Control

Procedures and policies implemented by a company to safeguard its assets, ensure accurate financial reporting, and promote operational efficiency.