Suppose That for a Particular Firm the Only Variable Input

question 329

Multiple Choice

Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that marginal cost of the third worker hired is $40, and the average total cost when three workers are hired is $50. What is the total cost of production when three workers are hired?

• A)$50
• B)$90
• C)$120
• D)$150

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Definitions:

Solenoid

A coil of wire designed to create a magnetic field when an electric current is passed through it, often used to control valves or relays.

Relay

An electrically operated device that mechanically switches electric circuits.

Final Control Element

A device that directly manipulates a process variable to achieve a desired change, such as a valve or a motor.

Proportional Controller

A type of feedback controller that generates an output signal by multiplying the error between a desired setpoint and a measured process variable by a constant.