Refer to the Following:
the Capital Stock Is Fixed at 50

question 8

Multiple Choice

Refer to the following:
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit.

$$\begin{array} { c c } &\text { Average } \\\text { Output } & \text { Variable Cost }\\\hline 10 & \$ 40 \\20 & 30 \\30 & 45 \\40 & 60 \\\hline\end{array}$$
-If the firm produces 30 units of output, how many units of labor does the firm use?

• A) 30
• B) 45
• C) 54
• D) 60
• E) none of the above

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Definitions:

Maximum Price

A price ceiling set by the government or another regulatory body, beyond which prices cannot legally rise for essential goods or services.

Economic Impact

The effect of an event, policy, or market change on the economy, which can be measured in terms of changes in employment, GDP, or other economic indicators.

Apartments

Living spaces within a building or complex, typically rented, that provide residential accommodation.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded.