Table 18-9 The Following Table Shows the Production Function for a Particular

question 164

Multiple Choice

Table 18-9
The following table shows the production function for a particular business. The numbers represent the various labor and output combinations the firm may choose for its output on a daily basis.
-Refer to Table 18-9. Suppose this firm charges a price of $5 per unit of output and pays workers a wage equal to $160 per day. What is the value of the marginal product of labor for the third worker?

• A)$90
• B)$250
• C)$300
• D)$800

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Definitions:

Price

The amount of money required to purchase a good, service, or asset, determined by factors like supply and demand, production costs, and market competition.

Economies Of Scale

The cost advantage that arises with increased output of a product, where the cost per unit decreases as production expands.

Financial Resources

Funds available to a business or individual for spending in the form of cash, liquid securities, and credit lines.

High Capital Costs

Expenses incurred in acquiring or upgrading physical assets such as buildings and machinery, which can be a barrier to entry for new companies.