Assume Fixed Costs Are 470 and Labor Costs $20 Per

question 70

Multiple Choice

Assume fixed costs are 470 and labor costs $20 per unit. The first laborer produces 20 units of output. Subsequent hires add 5 units less to production than the previous worker. Thus the second worker adds 15, the third adds 10 etc. If the fifth laborer adds 25 units to the short run production output and the sixth laborer adds 20 units to the total output and the firm can hire all the labor it wants at the going wage we can be sure that

• A)marginal cost is increasing.
• B)average total cost is increasing.
• C)average variable cost is increasing.
• D)None of these is correct because all the costs listed are decreasing.

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Definitions:

Complex Organizations

are large-scale entities characterized by multiple layers of bureaucracy, diverse functions, and often operating in various locations or sectors.

Complexity Theories

Complexity theories explore how systems, patterns, and behaviors emerge from the interaction of parts within a complex system, often applied in fields like biology, sociology, and economics.

Cognitive Processes

Mental actions or operations that involve thinking, understanding, learning, and remembering.

CEOs

Chief Executive Officers who are the highest-ranking individuals in a company, responsible for major corporate decisions.