Gordon Is a Senior Majoring in Computer Network Development at Smart

question 308

Multiple Choice

Gordon is a senior majoring in computer network development at Smart State University.While he has been attending college,Gordon started a computer consulting business to help senior citizens set up their network connections and teach them how to use e-mail.Gordon charges $25 per hour for his consulting services.Gordon also works 5 hours a week for the Economics Department to maintain that department's Web page.The Economics Department pays Gordon $20 per hour.From this information we can conclude:

• A) Gordon should increase the number of hours he works for the Economics Department to make it comparable to his consulting business income.
• B) Gordon is obviously not maximizing his well-being if he continues to work for the Economics Department.
• C) If Gordon chooses one hour at the beach with his friends rather than spend one more hour with a consulting client,the forgone income of $25 is considered a cost of the choice to go to the beach.
• D) Both b and c are correct

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Definitions:

Marginal Product

The additional output resulting from the use of one more unit of a particular input, holding other inputs constant.

Total Product

The total output produced by a firm or within an economy.

Average Product

The output per unit of input, such as the quantity of goods produced per worker.

Law Of Diminishing Returns

The principle that as successive increments of a variable resource are added to a fixed resource, the marginal product of the variable resource will eventually decrease.