Labor Output Price (D1) Price (D2) 0 0 $10.00 $10.00 1 15 10.00 9.50 2 29 10.00
ID: 2494671 • Letter: L
Question
Labor Output Price (D1) Price (D2)
0 0 $10.00 $10.00
1 15 10.00 9.50
2 29 10.00 9.00
3 42 10.00 8.50
4 54 10.00 7.50
5 65 10.00 6.50
6 75 10.00 5.50
14. Suppose the firm’s product demand is given by the column labeled D1. If the wage rate is $100, the firm will achieve maximum profit by hiring _____ workers.
a. 3 b. 4 c. 5 d. 6
15. Suppose the firm’s product demand is given by the column labeled D1. If the wage rate rises from $100 to $130, the firm will reduce the quantity of labor employed by _____ unit(s)
a. 0 b. 1 c. 2 d. 3 16.
Suppose the firm’s product demand is given by the column labeled D1. If the wage rate is $120, the firm will achieve maximum profit by hiring _____ workers.
a. 3 b. 4 c. 5 d. 6 3 17.
Suppose the firm’s product demand is given by the column labeled D1. The value of the marginal product of the fourth worker is:
a. $10 b. $54 c. $120 d. $540 18.
Suppose the firm’s product demand is given by the column labeled D2. If the wage rate is $100, the firm will achieve maximum profit by hiring _____ workers
a. 2 b. 3 c. 4 d. 5 19.
Suppose the firm’s product demand is given by the column labeled D2. The extra revenue generated by the fourth worker is:
a. $1 b. $12 c. $48 d. $405 20.
Suppose the firm’s product demand is given by the column labeled D2. If the wage rate rises from $100 to $130, the firm will reduce the quantity of labor employed by _____ unit(s).
a. 0 b. 1 c. 2 d. 3 21.
Compared to a firm facing D1, a firm facing demand schedule D2 but paying the same wage will hire:
a. the same number of workers, since total product is the same in both instances
b. fewer workers, since product price declines as output increases
c. more workers, since product price declines as output increases
d. more information is required
Explanation / Answer
14. Suppose the firm’s product demand is given by the column labeled D 1 . If the wage rate is $100, the firm will achieve maximum profit by hiring _____ workers.
Ans:- d. 6
15. Suppose the firm’s product demand is given by the column labeled D 1 . If the wage rate rises from $100 to $130, the firm will reduce the quantity of labor employed by _____ unit(s)
Ans:- c.2
16. Suppose the firm’s product demand is given by the column labeled D 1 . If the wage rate is $120, the firm will achieve maximum profit by hiring _____ workers.
Ans:- b. 4
17. Suppose the firm’s product demand is given by the column labeled D 1 . The value of the marginal product of the fourth worker is:
Ans:- c.$ 120
18. Suppose the firm’s product demand is given by the column labeled D 2 . If the wage rate is $100, the firm will achieve maximum profit by hiring _____ workers
Ans:- a. 2
19. Suppose the firm’s product demand is given by the column labeled D 2 . The extra revenue generated by the fourth worker is:
Ans:- c. $48
20. Suppose the firm’s product demand is given by the column labeled D 2 . If the wage rate rises from $100 to $130, the firm will reduce the quantity of labor employed by _____ unit(s) .
Ans:- b. 1
21. Compared to a firm facing D 1 , a firm facing demand schedule D 2 but paying the same wage will hire:
Ans:- b. fewer workers, since product price declines as output increases
* Question No. 22 is not a complete question.
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