A property tax payment made by the owner of an apartment building is a
A) cost irrelevant to rent-setting decisions because it is not affected by supply and demand.
B) marginal cost of continuing to own the building.
C) marginal cost of supplying rental space.
D) marginal overhead cost and will therefore affect rental rates.
E) sunk cost and therefore cannot affect rents even in the long run.
Question 2
Assume that both the goods and the labor market are perfectly competitive. If at equilibrium, the marginal cost faced by a firm is 3 and the market wage rate is 6, the marginal product of the last unit of labor hired by the firm must be:
A) 0.5 units.
B) 2 units.
C) 9 units.
D) 18 units.
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