Question : 39) The rule for employing a profit-maximizing amount of labor : 1241367

39) The rule for employing a profit-maximizing amount of labor is to continue to hire additional workers until the additional worker’s value of marginal product is

A) less than the wage rate.

B) equal to the wage rate.

C) greater than 1.

D) less than the price of the product.

E) equal to the price of the product.

40) Suppose the Miami Dolphins are considering adding another backup quarterback to their roster. If the salary the Dolphins would have to pay equals $1,000,000 and the value of marginal product of the new quarterback equals $1,200,000, to maximize their profit the Dolphins should

A) add the new quarterback.

B) add two new quarterbacks.

C) not add the new quarterback.

D) not add the new quarterback and, in fact, get rid of at least one other backup quarterback.

E) Not enough information is given to determine if the Dolphins should hire the quarterback.

41) Suppose Mongo runs a glue factory in Knuckle, North Dakota. Mongo wants to fire his cousin Beevo for not working very hard at making glue. If firing Beevo would save Mongo $6.11 per hour in wages and the value of Beevo’s marginal product equals $7.29 per hour, to maximize his profit, Mongo should

A) fire Beevo.

B) keep Beevo employed.

C) add another worker, Teevo, Beevo’s sister, whose value of the marginal product would be $4.83 per hour and whose wage would be $6.11 per hour.

D) increase the wage he pays Beevo to $7.29 per hour.

E) There is not enough information given to determine what Mongo should do.

42) If the value of marginal product of the 10th worker is $60, then the

A) quantity of labor demanded when the wage rate is $60 will be 10 workers.

B) wage rate of the 10th worker will be $6.

C) firm will not hire the worker if the wage rate is less than $60.

D) marginal cost of the 10th worker will be $6.

E) quantity of labor demanded when the wage rate is $6 will be 10 workers.

43) If a firm finds itself at the point where the value of marginal product of labor is greater than its wage rate, then the firm

A) stops hiring more workers but does not fire any because the firm is maximizing its profit.

B) decreases the number of workers it has hired in order to increase its profit.

C) increases the number of workers it hires in order to increase its profit.

D) increases sales to keep its employees busy.

E) changes its employment of workers and maximizes its profit by hiring the number of workers that makes the difference between the value of the marginal product and the wage rate as large as possible.

44) If the wage rate exceeds the value of marginal product, a firm

A) is maximizing its profit.

B) can increase its profit by hiring more workers.

C) can increase its profit by firing some workers.

D) can increase its profit by increasing the wage rate and not changing its employment.

E) can increase its profit by increasing the wage rate and increasing its employment.

45) A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $45. Which of the following is correct?

A) The firm is employing the profit-maximizing quantity of labor.

B) Too much labor is currently employed and the firm will lay off some workers.

C) Too few workers are currently employed and the firm will hire more workers.

D) The firm should shut down and produce nothing.

E) More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor.

46) A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $53. Which of the following is correct?

A) The firm is employing the profit-maximizing quantity of labor.

B) Too much labor is currently employed and the firm will lay off some workers.

C) Too few workers are currently employed and the firm will hire more workers.

D) The firm should shut down and produce nothing.

E) More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor.

47) A company finds that the value of marginal product for the current level of employment is $53 and the wage rate is $75. Which of the following is correct?

A) The firm is employing the profit-maximizing quantity of labor.

B) Too much labor is currently employed and the firm will lay off some workers.

C) Too few workers are currently employed and the firm will hire more workers.

D) The firm should shut down and produce nothing.

E) More information about the price of the product is needed to determine if the firm is hiring the profit-maximizing amount of labor.

48) The demand curve for labor is the same as the firm’s

A) marginal revenue curve.

B) marginal cost curve.

C) value of marginal product of labor curve.

D) wage rate curve.

E) supply of output curve.