Question : 21) A firm’s primary interest when it hires an additional : 1387967

 

 

21) A firm’s primary interest when it hires an additional worker is

A) the cost of hiring the additional worker.

B) how the average output of the firm will be affected by this new worker.

C) the extra revenue the firm realizes from hiring that worker.

D) whether or not the new worker gets along with the firm’s existing workers.

 

 

22) The firm’s gain in profit from hiring another worker is

A) the marginal revenue product of the extra worker.

B) the difference between marginal revenue product and the wage of the worker.

C) the extra output of the extra worker.

D) the reduction in costs from hiring another worker.

 

Table 17-2

 

Quantity of Labor

Output of iPods per Week

Marginal Product of Labor

Product Price

(dollars)

 

Wage

(dollars)

 

1

  8

8

$300

$350

2

15

7

  280

  350

3

21

6

  260

  350

4

26

5

  240

  350

5

30

4

  220

  350

6

33

3

  200

  350

7

35

2

  180

  350

 

23) Refer to Table 17-2.  The firm represented in the diagram

A) has market power in the factor market.

B) has market power in the output market.

C) has market power in both the factor and product market.

D) has no market power in the factor or product market.

 

 

24) Refer to Table 17-2.  The marginal revenue product of labor from the third unit of labor is

A) $5,460.

B) $1,560.

C) $1,260.

D) $780.

 

25) Refer to Table 17-2.  The marginal profit from hiring the second unit of labor is

A) $4,200.

B) $1,960.

C) $1,800.

D) $1,450.

 

 

26) Refer to Table 17-2.  What is the profit-maximizing quantity of labor that the firm should hire?

A) 5 units

B) 4 units

C) 3 units

D) 2 units

 

 

27) Suppose a competitive firm pays a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by five units per hour, then to maximize profits the firm should

A) not change the number of workers it currently hires.

B) lay off some of its workers.

C) hire the additional worker.

D) There is not enough information to answer the question.

 

28) Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If hiring another worker would increase output by three units per hour, then to maximize profits the firm should

A) not change the number of workers it currently hires.

B) not hire an additional worker.

C) hire another worker.

D) There is not enough information to answer the question.

 

 

29) Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If the last worker hired increases output by three units per hour, then to maximize profits the firm should

A) not change the number of workers it currently hires.

B) lay off some of its workers.

C) hire additional workers.

D) There is not enough information to answer the question.

 

 

30) Let MP = marginal product, P = output price, and W = wage; then the equation that represents the condition where a competitive firm would hire another worker is

A) P × MP = W.

B) P × MP < W. C) P × MP > W.

D) P × W > MP.