Suppose That a Firm Has Only One Variable Input, Labor

question 109

Multiple Choice

Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers the firm produces 90 units of output. Fixed costs of production are $6 and the variable cost per unit of labor is $10. The marginal product of the seventh unit of labor is 4. Given this information, what is the average variable cost of production when the firm hires 7 workers?

• A)$12.67
• B)$11
• C)81 cents
• D)75 cents

Understand the correct format for stating times.

Understand the rules of proper capitalization in English.

Identify the correct capitalization of historical periods and events.

Learn the correct capitalization of geographical names and locations.

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Definitions:

Fair Labor Standards Act

A U.S. law that sets minimum wage, overtime pay eligibility, recordkeeping, and child labor standards.

Regular Hourly Wage

Regular Hourly Wage is the fixed amount of money that an employee is paid for each hour worked, excluding overtime or bonuses.

Gross Wages

The total amount of money earned by an employee before any deductions or taxes are applied.

Salaries And Wages Expense

The total amount recorded by a business for the compensation of employees, including both salaries and hourly wages.