NARRBEGIN: Exhibit 7-2 Exhibit 7-2

question 169

Multiple Choice

NARRBEGIN: Exhibit 7-2
Exhibit 7-2

-Given the information in Exhibit 7-2, what is the average product of the third unit of labor?

• A) 45 pairs of shoes
• B) 25 pairs of shoes
• C) 15 pairs of shoes
• D) $45
• E) $25

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Definitions:

Marginal Cost

Marginal cost is the change in total production cost that comes from making or producing one additional unit of a good.

Perfectly Competitive

Refers to a market structure where there are many buyers and sellers, all producing homogenous products, with no single participant having the power to influence the market price.

Industry Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of the industry for that good.

Elastic

Describes a situation where the quantity demanded or supplied changes significantly in response to a change in price.