The table above shows a total product schedule. Suppose that labor costs $20 per worker and fixed costs are $60. The total cost of producing 80 units equals
A) less than $5.
B) more than $5 and less than $110.
C) more than $110 and less than $120.
D) more than $120 and less than $150.
E) more than $150.
D
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If the Fed wanted to shift to a restrictive monetary policy and reduce the money supply, it could
a. increase the interest rate paid on excess reserves encouraging banks to extend more loans. b. decrease the interest rate paid on excess reserves encouraging banks to extend more loans. c. decrease the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans. d. increase the interest rate paid on excess reserves encouraging banks to hold excess reserves rather than extend more loans.
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000.
What is AVC at its minimum?
A. $100 B. $80 C. $50 D. $8 E. $35