Question

If the wage paid to all units of labor is $20, how many units of labor are employed?:

a) 10 units
b) 15 units
c) 20 units
d) It depends on the firm's production function

Answer 1

The company will employ 10 units of labor if the wage paid to all units of labor is $20.

Step-by-step explanation:

In order to determine how many units of labor are employed, we need to know the total cost of labor and the cost per unit of labor. If the wage paid to all units of labor is $20, we can calculate the number of units of labor employed by dividing the total cost of labor by the cost per unit of labor.

For example, if the total cost of labor is $200, then the number of units of labor employed would be $200 / $20 = 10 units.

Therefore, the correct answer is a) 10 units.