You've been hired by an unprofitable firm to determine whether it should shut down its operation. The firm currently uses 70 workers to produce 300 units of output per day
The daily wage (per worker) is $100, and the price of the firm's output is $30. The cost of other variable inputs is $500 per day. Although you don't know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue. You know that the marginal cost of the last unit is $30. Should the firm continue to operate at a loss? Carefully explain your answer.
VC = $7,000 + 500. Thus AVC = 7500/300 = $25. Since P > AVC, the firm should continue to operate in the short run.
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The above table gives data for the nation of Mouseville. There are no imports into or exports from Mouseville. Unplanned inventory changes are zero when real GDP equals
A) $300 billion. B) $500 billion. C) $900 billion. D) $700 billion. E) $800 billion.
Buying insurance can create a moral hazard
Indicate whether the statement is true or false
In repeated games:
A. cooperation never happens. B. players always cooperate and enjoy a mutually beneficial equilibrium. C. a noncooperative outcome is more likely than in a single-round game. D. a cooperative outcome is more likely than in a single-round game.
Gino's Pizza shop hires workers in a competitive market to make pizza. The ingredients required to make each pizza cost $5. Daily output at Gino's Pizza varies with the number of workers hired, as shown in the table: Number of workersPizzas/day00116236354470584696 If pizzas sell for $8 each, what is the value marginal product for the 4th worker?
A. $96 per day B. $128 per day C. $48 per day D. $112 per day