1. In terms of contribution to total income in the United States, the single mos
ID: 1213131 • Letter: 1
Question
1. In terms of contribution to total income in the United States, the single most important factor of production is:
capital.
labor.
natural resources.
entrepreneurship.
2.
Look at the above figure. Let's assume that the market wage for bricklayers is Eighty dollars per day, then this construction company will employ________ bricklayers.
four
six
five
eight
3. A company that is maximizing profit, will hire employees up to the quantity of workers where:
VMPL > W.
VMPL = W.
VMPL < W.
MP × MR = VMPL.
four
six
five
eight
3. A company that is maximizing profit, will hire employees up to the quantity of workers where:
VMPL > W.
VMPL = W.
VMPL < W.
MP × MR = VMPL.
Explanation / Answer
1) In terms of contribution to total income in the United States, the single most important factor of production is entrepreneurship. An entrepreneur is a profit-seeker who comes up an idea, tries to turn that idea into a marketable product, and accepts the risk of success or failure.
2) At equilibrium level of output, the wage rate is equal to the value of the marginal product labor: VMPL= w. For a wage rate of $80 per day, look at the corresponing horizontal distance till you reach the VMPL line. This point suggests that a total of Eight workers will be hired.
Hence option D is correct
3) As mentioned, at equilibrium level of output, the wage rate is equal to the value of the marginal product labor:
VMPL= w
Hence option B is correct
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