Each unit can be sold for 2 is it worth hiring the

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Unformatted text preview: tional bushels or is it the new worker using a tractor (which is a capital good) that harvests those 100 addi- Defining Terms 1. Define: a. marginal revenue b. law of diminishing marginal returns Reviewing Facts and Concepts 2. The additional output obtained by adding an additional worker is 50 units. Each unit can be sold for $2. Is it worth hiring the additional worker if she is paid $150 a day? Explain your answer. 3. Price is $20 per unit no matter how many units a firm sells. What is the marginal revenue for the ach year Fortune magazine ranks the top 500 corporations in the United States according to revenue. In recent years, a few of the largest revenue-earning corporations in the United States include Wal-Mart, Exxon, General Motors, and Ford Motor Company. If you want to find the most recent list of the Fortune 500, go to www.emcp.net/fortune. If you would like to learn what some of America’s highest-paid business executives earn, go to www.emcp.net/forbes and do a site search for “Top Paid CEOs.” E tional bushels of wheat? The answer is that it is the new worker using the tractor. The same type of story can be told for Marianne. People don’t usually work in isolation from other people or without certain capital goods. 50th unit? Explain your answer. The answer deals with average total cost.) Critical Thinking Graphing Economics 4. This section explained how a firm computes profit. Specifically, it computes total cost and total revenue and then finds the difference. Suppose a firm wants to compute its profit per unit. In other words, instead of computing how much profit it earns in total, it wants to know how much profit it earns per unit. How could the firm go about computing profit per unit? (Hint: 5. Suppose the marginal benefits of playing tennis are constant for each minute of the first 20 minutes and then steadily decline for each additional minute. The marginal costs of playing tennis are constant. Furthermore, marginal costs are equal to marginal benefits at the 45th minute. Diagrammatically represent the marginal benefits and marginal costs of playing tennis. Section 3 Revenue and Its Applications 183 07 (154-185) EMC Chap 07 11/17/05 5:15 PM Page 184 Economics Vocabulary Chapter Summary Be sure you know and remember the following key points from the chapter sections. Section 1 A business is an organization that uses resources to produce goods and services to sell to customers. A business needs a boss to efficiently coordinate and direct the activities of others in the organization. A sole proprietorship is a business owned by one person who makes the decisions, receives the profits earned, and is liable for the debts of the business. A partnership is a business owned by two or more partners who share in the profits and are responsible for any liabilities of the business. A corporation is a legal entity formed to conduct business and is owned by individuals who buy shares of the organization. Section 2 Fixed costs are expenses that are the same no matter how many units of a good...
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This document was uploaded on 01/16/2014.

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