Refer to the Following:
the Capital Stock Is Fixed at 40

question 90

Multiple Choice

Refer to the following:
The capital stock is fixed at 40 units, the price of capital is $15 per unit, and the price of labor is $80 per unit.
$$\begin{array} { c c } \text { units of } & \text { units of } \\\text { Labor } & \text { Output } \\\hline 5 & 40 \\10 & 100 \\15 & 180 \\20 & 220\end{array}$$
-If the firm produces 40 units of output, what is average fixed cost?

• A) $7.50
• B) $25
• C) $120
• D) $600
• E) none of the above

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Definitions:

Net Exports

The difference between a country's total exports and total imports, measuring the value of goods and services it sells to other countries minus what it buys.

Smaller Percentage

A proportionally less significant part or fraction of a whole, often used to compare relative sizes or amounts.

Interest Rate

A charge applied by lenders for loaning out assets, calculated as a fraction of the principal amount.

Exchange Rate

The price at which one country's currency can be exchanged for another country's currency.