Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. When the firm hires 6 workers the firm produces 90 units of output. Fixed costs of production are $6 and the variable cost per unit of labor is $10 . The marginal product of the seventh unit of labor is 4 . Given this information, what is the average total cost of production when the firm hires 7
workers?
a. $10.06
b. $9.64
c. 81 cents
d. 70 cents
c
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If in the economy, business saving equals $300 billion, household saving equals $10 billion and government saving equals -$200 billion, what is the value of national saving?
A. $210 billion B. $310 billion C. $110 billion D. $10 billion
Which of the following statements is an example of normative economic analysis?
A) Pollution regulations have raised the cost of production for energy companies. B) As the wage rate increases, companies are hiring fewer workers. C) Improvements in technology have reduced the time needed to manufacture automobiles. D) Tablet computers should be manufactured in countries that do not restrict internet access to their citizens.
Under a rule of reason approach, an act is illegal:
a. only if it is shown to result in an anticompetitive outcome. b. if two parties merge. c. if a firm engages in price discrimination. d. if two firms engage in price fixing. e. if two firms undertake a joint venture
Fun Time Toys produced $60 million worth of toys in 2008 . Because of a slow Christmas shopping season, only $50 million worth was sold to consumers, and the remaining $10 million worth went into inventories. Based on this information, how was GDP affected in 2008?
a. $60 million was added to GDP; $50 million was classified as consumption spending and $10 million was classified as private investment b. $60 million was added to GDP, all classified as consumption spending c. $50 million was added to GDP, all classified as consumption spending d. $40 million was added to GDP; $50 million was classified as consumption and -$10 million was classified as private investment e. $40 million was added to GDP, all classified as consumption