-Figure 7-2 Shows How Much a Firm Could Produce with Various

question 16

Multiple Choice

-Figure 7-2 shows how much a firm could produce with various amounts of labor holding capital and technology constant.What is the average product of labor when 20 units of labor are employed?

• A)230 units
• B)11.5 units
• C)130 units
• D)6.5 units
• E)110 units

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Definitions:

Retained Earnings

The portion of a company's profits not distributed as dividends but retained for reinvestment in the business or to pay debt.

Income Before Taxes

Another term for pretax income, indicating the amount earned by a business before subtracting taxes.