A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $1 a bushel, the wage rate is $12, the farmer employs six workers and the marginal product of the sixth worker is 10. What would you advise this farmer to do?
A. Increase employment because the wage paid is less than the marginal revenue product.
B. Reduce employment because the wage paid is greater than the marginal revenue product.
C. Reduce the product price so that the wage and marginal revenue product will be equal.
D. Do nothing because the wage rate and the marginal product of the last worker hired are equal.
Answer: B
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A) 12 tons of rice B) 15 thousand bottles of wine C) 9 thousand bottles of wine D) 3 tons of rice E) Nothing, it is a free lunch.
The figure above shows the costs associated with producing paper. When paper is produced, there is some pollution runoff into a lake
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Patents, copyrights, and trademarks
a. are examples of government-created monopolies. b. allow their owners to reduce the costs of what they produce. c. generate more revenue for the government than they cost consumers in the form of higher prices. d. All of the above are correct.
Refer to Figure 3.2, which shows David's and Celeste's individual supply curves for flower arrangements per week. Assuming David and Celeste are the only producers in the market, what is the market quantity supplied at a price of $20?
A. 0 B. 100 C. 150 D. 200