Question

Question Completion Status: QUESTION 44 Which of the following is an implicit cost? • Salaries paid to owners who work for the firm Interest on money borrowed to finance equipment purchases • cash payment for raw materials • foregone rent on office space owned and used by the firm QUESTION 45 When a firm's only variable input is labor, then the slope of the production function measures the • quantity of labor • quantity of output total cost • marginal product of labor QUESTION 46 If the firm produces 120 units of output with 12 workers, what is the average product of labor? 10 units 12 workers • 120 units 1200 units QUESTION 47 If the firm produces 120 units of output with 12 workers and 121 units of putput with 13 workers, what is the marginal product of a 10 units - 12 • 1 unit • 121 units QUESTION 48 Which of these assumptions is realistic for a firm in the short run? Both the size of the factory and the number of workers can be varied Only the factory size can be varied, not the number of workers . Only the number of workers can be varied, not the factory sizee Both factory size and the number of workers can be varied QUESTION 49 Afirm is currently producing where MC-55 and MR 510. This firm is profit-maximicing under-producing over producing no conclusion can be made QUESTION 50 A firm should increase its production when marginal revenue rises and marginal cost stays the same marginal cost rises and marginal revenue stays the same • both marginal cost and marginal revenue are falling both marginal cost and marginal revenue are rising Click Save and submit to see and submit. Click Save Answers to see all answers

Answer 1

Q44.

D. Forgone rent on office space owned and use by the firm.

Explanation : implicit cost are those which are not actually paid but the opportunity cost. So here above all the options are the example of explicit cost. Forgone rent is not the actually expense paid but if he rented it to someone he can earn out of it but he gives free to its firm so, it is his opportunity cost or implicit cost.

Q45

A. Quantity of labour

Explanation:

Here in the production function if there is only one input and that is labour than it measures quantity of labour. It shows that the if we use 1 labour how much we gets the output.

Q46

A. 10 units

Explanation :

Average product of labour = total output / labour

=120/12

=10 units

Q47

C. 1 unit

Explanation:

Marginal product of the labour = change in quantity /change in labour

=(121-120)/(13-12)

=1 Unit.

Q48

C. Only number of worker can be varied, not the factory size.

Explanation :

In the short run we can only change the number of workers but we can not change the factory size because it takes time and lots of money to change in the factory size but workers can easily change.

Q49

B. Under producing

Explanation = firm can maximise its profit when the MR=MC. Here firm is producing where MC is less then MR. So to equal the MR and MC firm should produce more. So we can say that it is under producing.