A Firm Can Use 50 Workers and 10 Machines, 70

question 40

Multiple Choice

A firm can use 50 workers and 10 machines, 70 workers and 9 machines, or 75 workers and 9 machines to produce 40 chairs. If each worker costs $20 and each machine is rented for $500, the economically efficient input combination is:

• A) 50 workers and 10 machines.
• B) 70 workers and 9 machines.
• C) 75 workers and 9 machines.
• D) 120 workers and 19 machines.

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Definitions:

Economic Profit

This refers to the total revenue of a business minus its explicit and implicit costs, representing the true profitability after all costs are accounted for.

Entrepreneurship Reflects

Describes the act of initiating, designing, and running a new business, often seen as a solution to economic needs or as an opportunity for innovation.

Market Power

The ability of a firm that is not a pure monopolist to earn persistently large profits, indicating that it has some monopoly power. Because the firm has few (or weak) competitors, it has a degree of freedom from vigorous competition.

Soviet Bloc

The group of communist states of Central and Eastern Europe, including the Soviet Union, that existed during the Cold War.