The Following Data Show the Total Output for a Firm

question 138

Multiple Choice

The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital.When answering the questions,you are to assume that the wage per unit of labour is $25 and the cost of the capital is $100.
TABLE 7-4
-Refer to Table 7-4.The marginal product of labour is at its maximum when the firm changes the amount of labour hired from

• A)0 to 1 unit.
• B)1 to 2 units.
• C)2 to 3 units.
• D)3 to 4 units.
• E)4 to 5 units.

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Definitions:

Variable

An element, feature, or factor that is liable to vary or change, often used in the context of experiments or mathematical models.

Output

The total amount of goods and services produced by an economy, company, or sector.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output produced, representing the variable cost per unit of output.

AVC

Average Variable Cost, the total variable cost divided by the quantity produced, representing the cost of labor and materials for each unit of output.