In 1965,as Per Capita Income Among a Particular Segment of the Population

question 18

Multiple Choice

In 1965,as per capita income among a particular segment of the population fell from $10,200 to $9,800,everything else remaining constant,annual per capita consumption of beer fell from 55 to 45 gallons; this implied an income elasticity of demand for beer of:

• A) 4.44.
• B) 4.55.
• C) 5.0.
• D) 4.65.
• E) 0.5.

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Definitions:

Optimal Labor Employment

The ideal quantity of labor that a firm employs where the marginal cost of hiring an additional worker equals the marginal revenue product.

Power Drills

Electric tools designed for drilling holes or driving fasteners into various materials.

Marginal Product

Marginal product is the additional output that is produced by using one more unit of a particular input, keeping all other inputs constant.

Optimal Labor Employment

The most efficient level of labor usage where the additional cost of employing one more worker equals the additional revenue generated.