Refer to the above table. If the price of the good produced is $9, the marginal revenue product of the 13th worker is
A. $684.
B. $63.
C. $36.
D. $81.
Answer: B
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A country engaging in trade according to the principles of comparative advantage gains from trade because it
A) is producing exports indirectly more efficiently than it could alternatively. B) is producing imports indirectly more efficiently than it could domestically. C) is producing exports using fewer labor units. D) is producing imports indirectly using fewer labor units. E) is producing exports while outsourcing services.
With regard to the rule of caveat emptor in colonial America, which of the following does not apply?
(a) "Let the buyer beware." (b) This rule largely replaced the earlier rule of markets, market overt, by late colonial times. (c) It could be applied anywhere without the protective regulations of colonial officials. (d) It was meant to cover fraud, and aggrieved buyers could always sue sellers in civil courts for damages.
Your friend Shahla argues that inflation is bad for the economy because it lowers everyone's purchasing power. How would an economist respond to Shahla's statement?
a. Her statement is true. b. Her statement is false because inflation redistributes income but does not change the average level of income in the economy. c. Her statement is true when everyone's nominal income changes by the same amount. d. Her statement is true when wages and benefits are not indexed to the CPI. e. Her statement is true only in a closed economy.
A commitment problem exists when people cannot achieve their goals because:
A. the payoff matrix is unknown. B. they cannot make credible threats or promises. C. they cannot play their dominant strategy. D. they do not have the first-mover advantage in a sequential move game.