The questions below deal with the Gizmo Company, which has the following product

Question

The questions below deal with the Gizmo Company, which has the following production function. The marginal product of the fourth gizmo worker hired is The marginal rate of substitution measures the value in dollars of the last unit of good obtained by the consumer. the rate at which a consumer is willing to exchange one good for another. the willingness of a consumer to exchange a good with another consumer. the willingness of a consumer to pay the form for a good. The marginal product of a factor of production is equal to the amount of additional output that can be produced with one additional unit of that factor input, holding constant the quantities of the other factor inputs. is equal to the amount of additional output that can be produced with one additional unit of each factor input. always exceeds the average product of that factor input, holding constant the quantities of the other factor inputs. is equal to the ratio of the amount of that factor of production to the amount of output produced.

Explanation / Answer

8.

Correct Answer:

B. 5

Explanation:

Marginal product of fourth gizmo worker hired = gizmo produced by four worker - gizmo produced by three worker = 31 – 26 = 5

9.

B. The rate at which a consumer is willing to exchange one good for another.

Explanation:

It is the rate at which consumer substitute one product for another to achieve the utility.

10.

A. is equal to the amount of additional output that can be produced with one additional unit of that factor input , holding constant the quantities of the other factor inputs.

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