Suppose That for a Particular Firm the Only Variable Input

question 200

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 when four units of output are produced, the total cost is $175, and the average variable cost is $33.75. What would the average fixed cost be if ten units were produced?

• A)$4
• B)$10
• C)$40
• D)$135

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Definitions:

Normal Curve

A bell-shaped curve that represents the distribution of many types of data where most values cluster around a mean.

Z Score

A numerical indicator showing how a specific value compares to the average of a set of values, given as the number of standard deviations away from that average.

Distributions

Statistical data arrangements showing the frequencies of potential outcomes or occurrences.

Normal

A term describing data or a distribution that conforms to a normal curve, typically indicating a balanced or typical state.