Exhibit 21-14 Assume That Labor Is the Only Variable Input

question 70

Multiple Choice

Exhibit 21-14
Assume that labor is the only variable input and that each additional laborer is paid $600.
-Refer to Exhibit 21-14. What is the marginal cost of producing this good with 1 and 2 laborers working [blanks (E) and (F) ], respectively?

• A)$600; $300
• B)$60; $30
• C)$8; $12
• D)$6; $8
• E)none of the above

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Definitions:

Compounded Semi-Annually

An interest calculation method where interest is added to the principal balance twice a year, leading to more interest accrued over time than if compounded once a year.

Monthly Payments

These are payments made once a month, as in a loan or lease, towards reducing the outstanding balance owed.

Borrow

To receive something from someone with the intention of returning it or its equivalent value at a later date.

Compounded Quarterly

The process of calculating and adding interest to a principal amount every quarter or three months, causing the principal to grow at an increasing rate.