Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 14, Problem 6MCQ
To determine
Choose the correct answer from the following options: An increase in the wage rate ____.
- Shifts the
average total cost curve and the marginal cost curve upward - Shifts the average fixed cost and
average variable cost curve upward - Increases average variable cost but does not change marginal cost
- Does not change average variable cost but increases average total cost
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Jake is a corn farmer in Nebraska. He rents his land on a long-term lease for $250,000 a year. He pays his farm hands $28,000 a year. Is his rent a fixed cost or a variable cost? Are the wages he pays his workers a fixed cost or a variable cost?
Average total cost, average variable cost marginal cost and marginal product
b. The relationship between marginal product and marginal cost is reciprocal or
opposite. Why is it so? Explain.
If a cost-minimization firm’s marginal product of labor equals 1 ton of output, while the marginal product of capital equals 7 tons of output and the cost of capital is $14 per unit, then
A.
The cost of labor must be $1/7
B.
The cost of labor (wage rate) must be $2
C.
The cost of labor must be $7
D.
The cost of labor must be $14 as well
Chapter 14 Solutions
Foundations of Economics (8th Edition)
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