Suppose That the Firm's Only Variable Input Is Labor

question 64

Multiple Choice

Suppose that the firm's only variable input is labor.When 50 workers are used,the average product of labor is 50 and the marginal product of labor is 75.The wage rate is $80 and the total cost of the fixed input is $500.Suppose that installation of a new assembly line increases the output produced per worker.The cost per unit of output

• A)will increase.
• B)will decrease.
• C)will be unchanged.
• D)is at its maximum.
• E)is at its minimum

Understand the relationship between interest rates and bond prices.

Recognize the different risks associated with bond investing.

Explain the importance and functions of bond covenants and how they protect bondholders.

Understand the different yield curves and what they signify about market conditions.

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