Exhibit 28-7

-Refer to Exhibit 28-7.As the firm increases employment from 50 to 60 workers,by how much does total labor cost increase?

Question

Exhibit 28-7
 
-Refer to Exhibit 28-7.As the firm increases employment from 50 to 60 workers,by how much does total labor cost increase?

Quizplus · Accepted Answer

From the exhibit, we can see that the cost per worker is constant at $10. Therefore, increasing employment from 50 to 60 workers will increase the total labor cost by $10 x 10 = $100. However, we also see that the fixed monthly cost of $1,000 is incurred regardless of the number of workers employed. So the total increase in labor cost will be $100 + $100 = $200. Therefore, the correct answer is D.

Exhibit 28-7 -Refer to Exhibit 28-7.As the Firm Increases Employment from 50