21. Using one more unit of a productive input raises a firm’s total revenue by $

Question

21.    Using one more unit of a productive input raises a firm’s total revenue by $10. This implies that the
    a.    marginal cost of the input is $10
    b.    marginal revenue product of the input is $10
    c.    marginal cost of the input is negative
    d.    marginal (physical) product of the input must be 10 units


22.    In the mid-1990s, the New York Rangers hockey franchise
    a.    had a smaller player payroll than the New York Islanders franchise
    b.    earned approximately half as much in home gate receipts as the New York Islanders franchise
    c.    had a larger player payroll than the New York Islanders franchise
    d.    had a smaller player payroll than home gate receipts, whereas the New York Islanders exhibited the opposite


23.    For a given sports organization in the short run,
    a.    marginal cost equals 0
    b.    TC = TVC - TFC
    c.    total costs consist only of fixed costs
    d.    TC = TFC + TVC

Explanation / Answer

21) a) marginal cost of the input is $10 because marginal revenue does not change whenever the firm produces more output.

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