Refer to the information. The per-unit cost of production in this economy is:
Answer the question on the basis of the following information. An economy is employing 2
units of capital, 5 units of raw materials, and 8 units of labor to produce its total output of 640
units. Each unit of capital costs $10; each unit of raw materials, $4; and each unit of labor, $3.
A. $0.05.
B. $0.10.
C. $0.50.
D. $1.00.
B. $0.10.
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Workers and firms are currently expecting the price level to increase from 110 to 114. The Federal Reserve then announces that it will be reducing the growth rate of the money supply
If the Fed's announcement is credible, and firms and workers have rational expectations, describe how the expectations of firms and workers will be affected and how the change in expectations will affect the unemployment rate.
Which of the following is false?
a. A true or pure monopoly exists where there is only one seller of a product for which no close substitute is available. b. The situation in which one large firm can provide the output of the market at a lower cost than two or more smaller firms is called a natural monopoly. c. In monopoly, the market demand curve may be regarded as the demand curve for the firm because it is the market for that particular product. d. A monopoly firm is a price maker, and it will pick a price that is the highest point on its demand curve.