Suppose a Firm Uses Workers and Office Space to Produce

question 95

Multiple Choice

Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The accompanying table describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.  
When the firm uses 9 employee-hours per day, its total revenue each day is:

• A)$240.
• B)$160.
• C)$120.
• D)$18.

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Definitions:

Information Processing

A cognitive approach that emphasizes the way individuals encode, store, and retrieve information.

Encoding

The process by which information is transformed into a format that can be stored in memory.

Retrograde Amnesia

A condition characterized by the loss of memories prior to a specific event, typically a traumatic one, while retaining the ability to form new memories.

Critically Injured

A condition describing individuals who have sustained life-threatening injuries requiring immediate and intensive medical treatment.