Question :
31) An avocado orchard employs five full-time workers. Currently, the : 1245231
31) An avocado orchard employs five full-time workers. Currently, the average product of labor is 120 pounds of avocados per day. The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados. The average product of the six workers will now be
A) more than 120 pounds.
B) less than 120 pounds.
C) equal to 120 pounds.
D) less than the marginal product of labor.
Figure 8-3
Fancy Footwear manufactures shoes. Figure 8-3 shows Fancy Footwear’s marginal product of labor and average product of labor curves in the short run.
32) Refer to Figure 8-3. Which of the following statements correctly describes the curves in the figure?
A) The marginal product of labor curve is represented by curve A and the average product of labor curve is represented by curve B.
B) The marginal product of labor curve is represented by curve B and the average product of labor curve is represented by curve A.
C) Curve A could represent either the average product curve or the marginal product and curve. Curve B represents the total product curve.
D) Curve B could represent either the average product curve or the marginal product curve. Curve A represents the total product curve.
33) Refer to Figure 8-3. For what quantity of labor does production display diminishing returns?
A) for more than 1 units of labor
B) for more than 4 unit of labor
C) for more than 5 units of labor
D) for more than 8 units of labor
34) The law of diminishing marginal returns
A) sets in because not all workers are equally productive.
B) applies only in the short run.
C) holds even when there are no fixed factors.
D) ultimately explains why production displays diseconomies of scale.
35) In the short run, why does a production function eventually display diminishing returns to labor?
A) As the number of workers increases it becomes difficult to monitor them.
B) As a firm hires more workers the skills and the work ethic of the additional workers will eventually decline.
C) As the number of workers increases eventually the gains from the division of labor and specialization are used up.
D) The opportunity cost of hiring additional workers must eventually rise.
Table 8-2
Number of Workers
Apples per Day (bushels)
1
50
2
120
3
180
4
230
5
270
6
300
Table 8-2 summarizes production at the Crunchy Apple Orchard for the month of April 2005.
36) Refer to Table 8-2. What is the marginal product of the 4th worker?
A) 230 bushels
B) 57.4 bushels
C) 50 bushels
D) 12.4 bushels
37) Refer to Table 8-2. What is the average product of labor when the orchard employs 5 workers?
A) 270 bushels
B) 54 bushels
C) 40 bushels
D) 8 bushels
38) The division of labor and specialization explain
A) why, when the marginal product of labor increases, so does the average product of labor.
B) why the average product of labor falls when firms use more capital or change the layout of their businesses.
C) why the marginal product of labor rises as a firm hires its first units of labor.
D) why firms may find it profitable to use more workers when the marginal product of labor is negative.
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