Figure 18-2 The Figure Below Shows the Production Function for a Particular

question 506

Multiple Choice

Figure 18-2
The figure below shows the production function for a particular firm.
-Refer to Figure 18-2. Suppose the firm pays a wage equal to $160 per unit of labor and sells its output at $10 per unit. What is the value of the marginal product of labor for the third worker?

• A)20 units
• B)$200
• C)$2,720
• D)$3,200

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Definitions:

Leisure

Leisure refers to the time available to an individual when not engaged in work, when one can relax, engage in recreational activities or hobbies.

Nonlabor Income

Income received from sources other than direct employment or labor, such as investments, retirement pensions, or social security benefits.

Wage Rate

The standard amount of compensation given for the performance of specific services, typically expressed per hour, day, or other periods of work time.

Budget Equation

An equation that represents the relationship between income, savings, and expenses.