Q21-30

1.If 6 workers can wash 42 cars a day and 7 workers can wash 50 cars a day, then the marginal product of the 7th worker equals

Select one:

A.42 cars a day.

B.50 cars a day.

C.8 cars a day.

D.7.1 cars a day.

E.7 cars a day.

2.The long run is a time period that is

Select one:

A.five years or longer.

B.long enough to change the amount of labour employed but not to change the size of the plant.

C.long enough to change the amount of labour employed.

D.long enough to change the size of the firm's plant and all other inputs.

E.None of the above answers describes the long run.

3.A perfectly competitive firm is earning an economic profit when total fixed costs increase. Assuming the firm does not shut down, in the short run the firm will

Select one:

A.charge a higher price.

B.produce less output to decrease total costs.

C.produce more output so the extra revenue will cover the increased costs.

D.continue producing the same quantity as before but will make less economic profit.

E.continue producing the same quantity as before and continue making the same economic profit as before.

.

Revenue and cost (dollars per unit) MC ATC 25 20 15 10 0 10 20 30 40 50 Output (thousands of units per year)Price and cost (dollars per pillow) l 00 90 BO 70 60 50 4O 30 20' | O 0 LOGO 2,000 3,000 4.000 5,000 Quantity (pillows per hour}