Table 13-5 -Refer to Table 13-5.Assume That Fixed Costs Are $500,and Variable

question 247

Multiple Choice

Table 13-5

-Refer to Table 13-5.Assume that fixed costs are $500,and variable costs are $100 per worker.For this firm,what are the shapes of the production function and the total-cost curve?

• A) Both the production function and total-cost curve are increasing at an increasing rate.
• B) Both the production function and total-cost curve are increasing at a decreasing rate.
• C) The production function is increasing at a decreasing rate, whereas the total-cost function is increasing at an increasing rate.
• D) The production function is increasing at an increasing rate, whereas the total-cost function is increasing at a decreasing rate.

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Definitions:

Income

The monetary payment received for one's work, investments, or other sources, primarily used for personal consumption, savings, and investment.

Present Value

The present value of an expected amount of money or sequence of cash flows, with a given return rate.

Interest Rate

The percentage at which interest is paid by borrowers for the use of money they borrow from a lender.

Consumption

The process by which goods and services are used up or consumed by individuals or groups, typically leading to satisfaction of needs or wants.