Author Question: If a business firm operates indefinitely without covering any of its sunk costs, what happens to the ... (Read 248 times)

meagbuch · **on:** Jun 29, 2018

If a business firm operates indefinitely without covering any of its sunk costs, what happens to the firm's sunk costs?

A) Nothing happens to them; they have ceased to exist.
B) They are distributed across the whole economy.
C) They continue unpaid for as long as the firm fails to make a profit large enough to cover them.
D) They reduce the wealth of the investors who risked their wealth to make mistaken decisions possible.

Question 2

When a firm hires 10 units of labor, 20 pens are produced. When it hires another unit of labor, the total output increases to 23 pens. If the price of one pen is 2, the value of marginal product of the eleventh unit of labor is:

A) 1.50.
B) 2.
C) 4.
D) 6.