Suppose there are profit-maximizing, competitive buyers and sellers of labor in an industry, and the amount of capital is fixed for each firm. Explain under what condition the output price will equal the wage rate
What will be an ideal response?
The profit-maximizing buyer of labor sets the output price equal to the marginal cost of producing an additional unit of output. The marginal cost of output when capital is fixed equals the wage rate divided by the marginal product of labor. If the marginal product of labor equals one, then the output price will equal the wage rate.
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Refer to Variable Cost of Production. If the total cost of producing the sixth unit of output is $190, fixed costs must be
The following questions refer to the following table which shows a firm's variable costs of production.
a. $8.
b. $22.
c. $30.
d. $40.
Since 1970, as a percent of GDP, M1 held has steadily decreased. Which of the following can account for this fact?
A) Real GDP has increased since 1970. B) The price level has risen since 1970. C) The nominal interest rate has steadily risen since 1970. D) The nominal interest rate has steadily fallen since 1970. E) Credit cards have become more widely available since 1970.
Both a defendant and plaintiff believe there is an 80 percent chance that the plaintiff will win $500,000 and a 20 percent chance that the plaintiff will lose and be awarded nothing (zero). If the plaintiff's litigation cost is $150,000 and the defendant's litigation cost is $200,000, the defendant would be willing to pay any amount up to ________ to settle.
A) $250,000 B) $200,000 C) $600,000 D) $550,000
Which of the following is a fixed cost of preparing meals?
a. dishwasher detergent b. chicken c. salad d. a microwave oven e. electricity