The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000.
When the firm uses 40 units of labor, what is average total cost at this output?
A. $170
B. $140
C. $70
D. $40
E. none of the above
Answer: A
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In a competitive market, a pollution tax increases the equilibrium price of the polluting good, decreases the equilibrium quantity, and decreases the volume of waste.
Answer the following statement true (T) or false (F)
Which of the following statements about the nominal and the real wage rates is correct?
A) The nominal wage rate equals the real wage rate divided by the CPI and then multiplied by 100. B) The nominal wage rate is measured in the dollars of a base year. C) The real wage rate is measured in current year dollars. D) The real wage rate indicates how many goods and services can be purchased with an hour's labor. E) The real wage rate equals the nominal wage rate multiplied by the CPI then divided by 100.
A negative externality exists if
A) there are quantity controls in a market. B) the marginal social cost of producing a good or service exceeds the private cost. C) there are price controls in a market. D) the marginal private cost of producing a good or service exceeds the social cost.
Refer to Figure 5.7. Which diagram best represents an income-consumption curve where bread is an inferior good?
A. A
B. B
C. C
D. D