Unformatted text preview: easing at a decreasing rate, whereas the total cost function is increasing at an increasing rate. d. The production function is increasing at an increasing rate, whereas the total cost function is increasing at a decreasing rate. 20. Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when the firm hires 4 workers, the firm produces 50 units of
output. If the fixed cost of production is $4, the variable cost per unit of labor is $20, and the marginal product of labor for the fifth unit of labor is 2, what is the average total cost of production when the firm hires 5 workers? a. $2.00 b. $20.00 c. $20....
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 Winter '08
 Nagata
 Economics, Microeconomics, d., A., REFER

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