Test Your Knowledge!

Marginal production of labor is:

Examples of fixed inputs in the short run typically are:

If a business adds a variable input (labor for example) to a fixed input (office space, machinery, etc.), then its output will:

If a firm’s total production increases from 30 products to 45 products as a result of hiring 3 additional workers, then the firm’s marginal product of labor for these quantities is:

Labor TP MP AP
0 0
2 50
4 35
6 40
8 300

In the above table, TP represents total production, MP is marginal production, and AP refers to average production. What are the total production and marginal production of workers 5 and 6 (the values in the row for labor = 6) are, respectively?

If the real interest rate is 4 percent, and inflation is 6 percent, then the nominal interest rate is:

If someone promises to give you $20,000 in exactly three years, how much is this worth to you today if the going interest rate is 4%?

The economic definition of a firm’s “long run” is:

Let’s assume that a business is operating in the short run. When it uses 1 building, 5 machines, and 2 workers, it produces 25 products. When it uses 1 building, 5 machines, and 4 workers, it produces 50 products. When it uses 1 building, 5 machines, and 6 workers, it produces 100 products. When it uses 1 building, 5 machines, and 8 workers, it produces 165 products. When it uses 1 building, 5 machines, and 10 workers, it produces 240 products. When it uses 1 building, 5 machines, and 12 workers, it produces 275 products. When it uses 1 building, 5 machines, and 14 workers, it produces 292 products. With the hiring of which workers does the law of diminishing marginal returns begin?

Labor TP MP AP
0 0
2 50
4 35
6 40
8 300

In the above table, TP represents total production, MP is marginal production, and AP refers to average production. What are the total production and marginal production of workers 7 and 8 (the values in the row for labor = 8) are, respectively?