What is the firm average product

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Harvey quit his job at State University, where he earned $50,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $7,000 a year. To start the business, he cashed in $80,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 12,000 units of software at $70 for each unit. Of the $70 per unit, $52 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building.

The explicit costs of Harvey's firm in the first year were

Multiple Choice

  • $216,000.
  • $624,000.
  • $151,000.
  • $840,000.

 Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed.

Number of Workers

Units of Output

0

0

1

40

2

90

3

126

4

150

5

165

6

180

What is the firm's average product when three workers are hired?

Multiple Choice

  • 18 units of output.
  • 36 units of output.
  • 42 units of output.
  • 21 units of output.

Reference no: EM133043301

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