39) Sam Lewis owns a firm in New York City's garment district. If Sam keeps adding workers to use the same number of sewing machines, eventually the workplace will become so crowded that workers will get in each other's way. At this point

A) the marginal product of labor in Sam's business would be negative and his total output would decrease.

B) Sam should encourage his workers to share their sewing machines.

C) Sam's business will be in violation of safety rules that have been established by the New York City government.

D) Sam should begin using a division of labor in his business.

40) In his book The Wealth of Nations, Adam Smith employed the example of a pin factory in order to explain what economic concept?

A) the relationship between the marginal and average product of labor

B) the law of diminishing returns

C) why no firm would want to hire so many workers as to experience a negative marginal product of labor

D) the division of labor

41) The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

A) the marginal product of labor.

B) the division of labor.

C) the average product of labor.

D) the average cost of production.

42) After Suzie, owner of Suzie's Sweet Shop, hires her 8th worker the average product of labor declines. Which of the following statements must be true?

A) The marginal product of the 8th worker is negative.

B) The marginal product of the 8th worker is less than the average product of labor before the 8th worker was hired.

C) Suzie's profits would be greater if she did not hire the 8th worker.

D) The average product of labor is negative.

43) Which of the following statements is true?

A) The average product of labor is at its maximum when the average product of labor equals the marginal product of labor.

B) The average product of labor is at its minimum when the average product of labor equals the marginal product of labor.

C) The average product of labor tells us how much output changes as the quantity of workers hired changes.

D) Whenever the marginal product of labor is greater than the average product of labor the average product of labor must be decreasing.

44) The marginal product of labor is calculated using the formula

A) L/Q.

B) ΔL/ΔQ.

C) ΔQ/ΔL.

D) Q/L.

45) Which of the following describes how output changes in the short run? Because of specialization and the division of labor, as more workers are hired

A) output will first increase at an increasing rate, then output will increase at a decreasing rate.

B) output will first decrease at an increasing rate, then increase at a decreasing rate.

C) the marginal product of labor will first decrease, then increase at a decreasing rate.

D) the marginal product of labor will first be negative and then will be positive.

46) If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output, what is the marginal product of the 12th worker?

A) 0.16

B) 3

C) 4.67

D) 36