Question : 29) Increases in the marginal product of labor result from : 1387742

 

 

29) Increases in the marginal product of labor result from

A) the use of new technology.

B) hiring more efficient workers.

C) the division of labor and specialization.

D) increasing the usage of all inputs.

 

 

30) Gertrude Stork’s Chocolate Shoppe normally employs 4 workers. When the Chocolate Shoppe hired a 5th worker the Shoppe’s total output decreased. Therefore,

A) the marginal product of the 5th worker is negative.

B) the total output of Gertrude Stork’s Chocolate Shoppe is negative.

C) the average product of the 5th worker is negative.

D) the 5th worker should be hired only if he is willing to accept a wage lower than the wage paid to the other 4 workers.

 

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 11-3

 

Fancy Footwear manufactures shoes. Figure 11-3 shows Fancy Footwear’s marginal product of labor and average product of labor curves in the short run.

 

32) Refer to Figure 11-3.  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 11-3.  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 11-2

 

Number of Workers

Apples per Day (bushels)

1

50

2

120

3

180

4

230

5

270

6

300

 

Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April 2005.

 

36) Refer to Table 11-2.  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 11-2.  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.