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Suppose That a Firm Has Only One Variable Input, Labor

question 179

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 total cost of production when the firm hires 7 workers?


Definitions:

Maturity Risk

The risk associated with the length of time until the face value of a bond or other debt instrument is repaid, affecting its price and yield.

Bond Investing

The process of investing in bonds, which are debt securities, to earn a return from interest payments and potential price appreciation.

Canada Call

A provision in some bonds that allows the issuer to redeem the bond early, specifically in the Canadian market.

Maturity Date

The specified date on which the principal amount of a bond or other debt instrument is due to be paid in full.

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