Question

Output ------- Total Cost -- Variable Cost

0                       500                  0

100                  5700              700

200                  6300            1300

300                  7100            2100

400                  8000            3000

10. In this table, diminishing marginal productivity first becomes evident when the firm employs which worker?

A) Worker number 2

B) Worker number 3

C) Worker number 4

D) Worker number 5

11. If marginal productivity of labor is falling, by hiring another unit of labor (all else held the same) we know that:

A) Average productivity must be falling

B) Marginal cost must be falling

C) Marginal cost must be rising

D) Average cost must be falling

12. In this table, the fixed cost of producing is:

A) $8,000

B) $700

C) $5,000

D) $3,000