Question

8. Adding more workers in a Subway store will eventually decrease marginal product of labor. This can be explained by a. Constant returns of scale b. Law of diminishing marginal product of labor Law of decreasing returns to scale d. c. Economies of scale Say, you are an entrepreneur, making designer T-shirts in your garage for questions 9-11. Your firms tota cost (TC) is given as TC 250+ 10 Q. Here, Qrefers to quantity of t-shirts. 9. Your fixed costs are a. $250/Q; 10 b. $250; 10 c. $250; 10*Q d. $250/Q; 10 _and your marginal costs are 10. As you increase production of T-shirts your average fixed costs and your marginal costs a. decrease; increase b. increase; decrease c. decrease; stay the same d. stay the same; increased 11. If you make 50 t-shirts, the average total cost is a. $16 b. $20 c. $15 d. $10

Answer 1

8.Adding more workers without increasing the size of the restaurant will decrease the marginal product of labour.

Answer-B

9.TC=250+10Q

FC=TC when Q=0

FC=250

VC=TC-FC

VC=10Q

Answer-C

10.AFC falls continuously with rise in output and MC first falls then rises.

Answer-A

11.ATC=TC/Q

TC=250+10(50)

TC=750

ATC =750/50

ATC=15

Answer-C