11) Refer to Figure 8-1. Diminishing marginal productivity sets in after
A) the 2nd worker is hired.
B) the 3rd worker is hired.
C) the 4th worker is hired.
D) the 5th worker is hired.
12) Refer to Figure 8-1. In a diagram that shows the marginal product of labor on the vertical axis and labor on the horizontal axis, the marginal product curve
A) never intersects the horizontal axis.
B) intersects the horizontal axis at a point corresponding to the 5th worker.
C) intersects the horizontal axis at a point corresponding to the 6th worker.
D) intersects the horizontal axis at a point corresponding to the 8th worker.
13) If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is
A) 60 units.
B) 54 units.
C) 48 units.
D) 5 units.
14) If another worker adds 9 units of output to a group of workers who had an average product of 7 units, then the average product of labor
A) will remain the same.
B) will increase.
C) will decrease.
D) and what will happen to it cannot be determined.
15) In the short run, marginal product of labor increases at first and then falls because
A) as more labor is hired, they are not as skilled as the first ones hired.
B) there are fewer opportunities for division of labor and specialization when fewer workers are hired.
C) managerial inefficiency sets in when a firm gets too large.
D) the new workers do not have as much experience as those who have been with the firm for a long time and therefore are not as productive.
Table 8-1
Number of Workers
Mushrooms per Day (pounds)
1
12
2
30
3
45
4
50
5
54
6
56
Table 8-1 shows the technology of production at the Matsuko’s Mushroom Farm for the month of May 2011.
16) Refer to Table 8-1. What is the marginal product of the 4th worker?
A) 137 pounds
B) 50 pounds
C) 12.5 pounds
D) 5 pounds
17) Refer to Table 8-1. What is the average product of labor when the farm hires 5 workers?
A) 4 pounds
B) 10.8 bushels
C) 38.2 pounds
D) 54 pounds
18) Refer to Table 8-1. Diminishing marginal returns sets in when the ________ worker is hired.
A) 2nd
B) 3rd
C) 4th
D) None of the above; the production function displays increasing marginal returns.
19) Who was the economist who first analyzed the advantages of specialization and the division of labor?
A) David Ricardo
B) Arthur C. Pigou
C) Ronald Coase
D) Adam Smith
20) One reason why, in the short run, the marginal product of labor might increase initially as more workers are hired is that
A) the first workers hired get to use the best equipment.
B) specialization allows a worker to focus on one task, thereby increasing her proficiency at that task.
C) the best workers are hired first and later hires are not as skillful.
D) beyond some point, a firm has hired too many workers.
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