Employment and Wage Rate

Topics: Employment, Economics, Supply and demand Pages: 4 (670 words) Published: April 9, 2013
Questions for Homework 7

1.| The value of marginal product A.| equals marginal product. | B.| describes the costs of hiring an extra worker. |
C.| equals marginal product divided by price. |
D.| equals average product times the wage rate. |
E.| equals marginal product times price. |
|

2.| The marginal product of the 14th worker is 8 and the firm sells its output for \$4 per unit. The value of the 14th worker's marginal product is A.| \$2. | B.| \$4. |
C.| \$12. |
D.| \$32. |
E.| \$56. |
|

Sam owns a candy factory and hires workers in a competitive labor market to case the bags of candy. His company's weekly output of cases of candy varies with the number of workers hired, as shown in the table:

Reference: Table 13-a

3.| The marginal product of the fourth worker is A.| 110. | B.| 130. |
C.| 140. |
D.| 145. |
E.| 150. |
|

Sam owns a candy factory and hires workers in a competitive labor market to case the bags of candy. His company's weekly output of cases of candy varies with the number of workers hired, as shown in the table:

Reference: Table 13-a

4.| If each case sells for \$5 more than the cost of the materials used in producing it, then the value marginal product for the 2nd worker is A.| \$150 | B.| \$310 |
C.| \$315 |
D.| \$750 |
E.| \$775 |
|

Sam owns a candy factory and hires workers in a competitive labor market to case the bags of candy. His company's weekly output of cases of candy varies with the number of workers hired, as shown in the table:

Reference: Table 13-a

5.| If each case sells for \$5 more than the cost of the materials used in producing it and the competitive market wage is \$650/week, how many workers should Sam hire? A.| 1 | B.| 2 |
C.| 3 |
D.| 4 |
E.| 5 |
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6.| The optimal number of workers for a perfectly competitive firm to hire occurs when A.| total labor costs equal total revenues. | B.|...