Table 102 -Refer to Table 10

question 94

Multiple Choice

Table 10.2
$$\begin{array} { | c | c | c | c | c | } \hline \begin{array} { c } \text { Quantity of } \\\text { labour }\end{array} & \begin{array} { c } \text { Output of iPods per } \\\text { Week }\end{array} & \begin{array} { c } \text { Marginal Product of } \\\text { labour }\end{array} & \begin{array} { c } \text { Product Price } \\\text { (dollars) }\end{array} & \begin{array} { c } \text { Wage } \\\text { (dollars) }\end{array} \\\hline 1 & 8 & 8 & \$ 300 & \$ 350 \\\hline 2 & 15 & 7 & 280 & 350 \\\hline 3 & 21 & 6 & 260 & 350 \\\hline 4 & 26 & 5 & 240 & 350 \\\hline 5 & 30 & 4 & 220 & 350 \\\hline 6 & 33 & 3 & 200 & 350 \\\hline 7 & 35 & 2 & 180 & 350 \\\hline\end{array}$$
-Refer to Table 10.2.What is the marginal profit from hiring the second unit of labour?

• A) $4200
• B) $1960
• C) $1800
• D) $1450

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Definitions:

Average Fixed Cost

Calculated by dividing total fixed costs by the quantity of output produced, showing the fixed cost per unit.

Sunk Cost Fallacy

The misconception that future decisions should be influenced by previously incurred costs that cannot be recovered.

Marginal Cost-Benefit Calculations

The process of evaluating whether the additional benefits of an action or investment outweigh its additional costs.

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, representing how fixed costs spread out over units of output as production increases.