Quantity Of Labor (Sneeches per hour) 1 2 3 4 5 6 7 8 9 10 Quantity Of Output (s

Question

Quantity Of Labor (Sneeches per hour) 1 2 3 4 5 6 7 8 9 10 Quantity Of Output (stars per hour) 19 28 36 43 49 54 58 61 63 Question 1: Mc Monkey Mc Bean, Inc. hires Sneeches to produce belly stars according to the production function in the table above. The company prices its belly stars at $5 each and Sneech wages are $20 per hour. Based on this information, what is the marginal product of labor of the 5h Sneech per hour? C 1) 43 stars per hour C 2) 6 stars per hour C 3) 7 stars per hour C 4) 43 S5 $215 per hour Question 2: Mc Monkey Mc Bean, Inc. hires Sneeches to produce belly stars according to the production function in the table above. The company prices its belly stars at $5 each and Sneech wages are $20 per hour. Based on this information, if the company hires 5 Sneeches per hour, what will be its profits? C 1) (43*$5)-(5$5) $190 per hour C 2) (5 *$5) (43 $20)--$835 per hour C 3) (5*$20) (43 *$5)--$115 per hour C 4) (43 $5)-(5* $20) -$115 per hour Question 21: Many entertainers earn thousands of times more income than K-12 teachers in the United States.This is because C 1 a. entertainers provide more total value than that provided by all teachers C 2) b. entertainers produce a higher value of marginal product relative to that of teachers. C 3) c. the supply of entertainers is small relative to the demand for their services C 4) Both b and c are correct.

Explanation / Answer

Question1 .

Quantity of output represents total product that can be produced using given amount of labour.

Marginal product at 5th sneech per hour = (Total product at 5th sneech per hour) - ( total product at 4th sneech per hour)

= 43 - 36 = 7 stars per hour.

Option (3) is the correct answer.

Question 2.

If the company hires 5 sneeches per hour then , its total profit will be equal to :

Price = $5 per star and Wage = $20 per hour (given )

and total product at 5 sneeches per hour is 43 and Labour amount is 5. Therefore,

Profit = Total product - total wages

= (43 ) ($ 5 ) - (5) ( $ 20) = $115 per hour .

Therefore option (4) is the correct answer.

Question 21. Many entertainers earn thousand of times more income than K-12 teachers in the united states .This is because entertainers produce a higher value of marginal product relative to that of teachers and The supply of entertainers is small relative to the demand for their services.

Therefore, option (4) is correct.

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