Information in Table 1 should be used to answer questions 5 and 6 below. The dat
ID: 1251346 • Letter: I
Question
Information in Table 1 should be used to answer questions 5 and 6 below. The data in the table show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital. When answering the questions, you are to assume that the wage per unit of labour is and the cost of the capital is $100. Refer to Table 1. The marginal cost of producing the 250th unit is approximately 35 cents.30 cents. 25 cents. 20 cents. None of the above is correct. Refer to Table 1. The average total cost for 250 units of output is approximately 40 cents. 36 cents. 24 cents. 20 cents. None of the above is correct.Explanation / Answer
5. Goods from 4 units of labor to 3 units of labor = 250-175 = 75. These 75 units cost one unit of labor = $15. These 75 units cost 1500 cents, so the 250th unit is approximately 1500 cents divided by 75 = 20 cents. 6. The total cost for 250 units is $100 in capital plus ($15)*(4) in labor. The total cost thus equals 100 + 60 = $160 = 16000 cents. The average total cost is 16000/250 = 64 cents = none of the above.