Gamma has $30,000 of capital per worker, while Omega has $7,500 of capital per worker. In all other respects, the two countries are the same. According to the principle of diminishing returns to capital, an additional unit of capital will increase output ________ in Gamma compared to Omega, holding other factors constant.
A. less
B. more
C. by the same amount
D. not at all
Answer: A
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When the average total cost is $16 and the total cost is $800, then the number of units the firm is producing is
A) impossible to determine with the information given. B) 12,800. C) 784. D) 50.
The components of a well-run incentive compensation scheme include all of the following EXCEPT
a. performing random acts of kindness to employees b. avoiding rewards for outcomes that are not included in the performance measures c. rewarding workers who for meet performance measures d. identifying the relevant measures on which to evaluate employees
Paul's Plumbing is a small business that employs 12 people. Which of the following is the best example of an implicit cost incurred by this firm?
a. The tax payments on property owned by the firm. b. The wages paid to the 12 employees. c. The half of the payroll taxes on the wages of the 12 employees paid by the employers, but not the half paid by the employees. d. The accounting services provided free of charge to the firm by Paul's wife, who is an accountant.
Red Stone Creamery currently hires 5 workers. When it added a 6th worker, its output actually fell. Which of the following statements is true?
A) The marginal product of the sixth worker must be negative. B) The average product of the sixth worker is negative. C) The sixth worker is not as skilled as the fifth worker. D) The total product becomes negative.