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Exam 18: The Markets for the Factors of Production

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Question 141

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A competitive, profit-maximizing pays its workers a wage of $294 per day. The marginal product of the last worker is 35 units of output. What is the firm's marginal cost of producing its last unit of output?

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Using the profit-maximizing co...

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Question 142

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Sunshine's Organic Market sells organic produce. Assume that labor is the only input that varies for the firm. The store manager has determined that if she hires 9 workers, the store can sell 200 pounds of produce per day. If she hires 10 workers, the store can sell 230 pounds of produce per day. The store earns $4 for each pound of produce that it sells, and the manager pays each worker $60 per day. Which of the following is correct?

A) For the 10th worker, the marginal product is 20 pounds of produce per day.
B) For the 10th worker, the marginal revenue product is $120 per day.
C) The marginal profit from the 10th worker is $120.
D) All of the above are correct.

E) B) and C)
F) B) and D)

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Question 143

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Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1. The figure illustrates the

Suppose a shift of the demand curve for strawberry pickers causes the equilibrium wage of strawberry pickers to increase by $2. The price of strawberries is $3 per pound before and after the shift. Does the shift increase the marginal product of the last picker hired, or does it decrease it? What is the amount of the increase or decrease?

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Suppose the firm sells each box of envelopes that it produces for $7.50. How many workers should the firm hire?

Table 18-3 -Refer to Table 18-3. For Firm D, the marginal product of labor is

Omega Custom Cabinets produces and sells custom bathroom vanities. Assume that labor is the only input that varies for the firm. The firm has determined that if it hires 10 workers, it can produce and sell 20 vanities per week. If it hires 11 workers, it can produce and sell 22 vanities per week. It sells each vanity for $800, and it pays each of its workers $1,000 per week. Which of the following is correct?

When labor supply increases,

Suppose that a violent earthquake causes the uninhabited Hawaiian island of Mokuauia (also called Goat Island) to fall into the Pacific Ocean. No people are killed or injured, and since the island is undeveloped, no buildings are destroyed. The island was a source of tourist income for Hawaiian landowners. Which of the following statements correctly describes the rents earned by the people who own land on the surrounding islands?

For a competitive, profit-maximizing firm, the labor demand curve is the same as the

The theory of labor supply is based on the trade-off between .

From 1960 to 2010, inflation-adjusted wages increased by 87 percent in the U.S. As a result, firms reduced the amount of labor they employed by nearly 15 percent.

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, the equilibrium wage of health care employees would

Which of the following could increase the labor-supply curve for computer-repair technicians?

Let L represent the quantity of labor, and let Q represent the quantity of output. Suppose a certain production function includes the points (L = 7, Q = 27), (L = 8, Q = 35), and (L = 9, Q = 45). Based on these three points, this production function exhibits diminishing marginal product.

Figure 18-12. The figure shows the relationship between the number of mechanics hired and the number of car repairs performed per day at a car-repair shop. -Refer to Figure 18-12. What is the marginal product of the third mechanic?

Table 18-11 Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day. -Refer to Table 18-11. What is the value of the marginal product of the second worker?

Figure 18-1 On the graph, L represents the quantity of labor and Q represents the quantity of output per week. -Refer to Figure 18-1. The marginal product of the second worker is

Table 18-12 The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. The time frame is one week. -Refer to Table 18-12. Suppose the firm sells each box of envelopes that it produces for $7. Suppose also that the firm's fixed costs amount to $400. How many workers should the firm hire in order to maximize profit, and what is the maximum profit?

Scenario 18-1 Harry owns a snow-removal business. He hires workers to shovel driveways for him during the winter. The first worker he hires can shovel twelve driveways in one day. When Harry hires two workers, they can shovel a total of 22 driveways in one day. When Harry hires a third worker, he shovels an additional eight driveways in one day. -Refer to Scenario 18-1. What is the marginal productivity of the second worker?