QUESTION 13 1 points Save Answ The owner of a sandwich shop considers hiring add
ID: 1102571 • Letter: Q
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QUESTION 13 1 points Save Answ The owner of a sandwich shop considers hiring additional workers for the lunch shift, but is concerned about cutting into profit. Using the table below, compute the marginal profit of hiring additional workers. tity of labor ber of arginal roduct rice alue rginal roduct age rginal profi workers 120 30 125 20 20 20 20 If the shop currently has only two employees, the owner should o a. not hire anyone else. o b.lay off one employee. o c. hire one more employee. d.hire two more employees.Explanation / Answer
16. d) hire workers as long as the wage is lower than the marginal profit of the last or previously hired worker.
When marginal profit is greater than the wage paid to worker then it will result in profit for the firm. Otherwise, firm is not interested in employing more workers.
17. d) surplus of nurses and downward pressure on wages.
When wage is greater than equilibrium wage then supply of nurses will be greater than the demand so surplus occurs in the market. To increase employment there is pressure on wage decrease.
18. b) downward, diminishing marginal product
20. b) The quantity of labor demanded falls.
Increase in minimum wage make hiring workers more expensive so demand of labor falls and as demand changes due to change in the wage of labor so there is movement of demand curve.
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