MACROECONOMICS
10th Edition
ISBN: 9781319106072
Author: Mankiw
Publisher: MAC HIGHER
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Question
Chapter 7, Problem 3QQ
To determine
The application of theory of efficiency wages
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Output TFC ($)
TVC ($)
TC ($)
(Q)
2
100
104
204
3
100
203
303
4
100
300
400
5
100
405
505
6
100
512
612
7
100
621
721
Given the information about short-run costs in the table above, we can conclude that the firm will minimize the average total cost of production when Q = (Round your response to
the nearest whole number.)
The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital. Assume that the wage per unit of labour is $20 and
the cost of the capital is $100.
Labour per unit of time
0
1
Total Output
0
25
T
2
3
4
5
75
137
212
267
The marginal product of labour is at its maximum when the firm changes the amount of labour hired from
○ A. 0 to 1 unit.
○ B. 3 to 4 units.
OC. 2 to 3 units.
OD. 1 to 2 units.
○ E. 4 to 5 units.
The table below provides the annual revenues and costs for a family-owned firm producing catered meals.
Total Revenues ($)
600,000
Total Costs ($)
- wages and salaries
250,000
-risk-free return of 7% on owners' capital of $300,000
21,000
- rent
101,000
- depreciation of capital equipment
22,000
-risk premium of 9% on owners' capital of $300,000
27,000
- intermediate inputs
146,000
-forgone wages of owners in alternative employment
-interest on bank loan
70,000
11,000
The implicit costs for this family-owned firm are
○ A. $70,000.
OB. $97,000.
OC. $589,000.
OD. $118,000.
○ E. $48,000.
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