When 4 units of labor are employed, total product is 7 units; when 5 units of labor are employed, total product is 9 units of output. If the price of output is $5 per unit, what is the marginal revenue product of the 5th unit of labor?
A. $10
B. $2
C. $40
D. $5
Answer: A
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Market equilibrium
i. can never occur because there are always people who want a good but cannot afford it. ii. occurs at the intersection of the supply and demand curves. iii. is the point where the price equals the quantity. A) ii and iii B) i only C) ii only D) i and ii E) iii only
Producing leather creates external costs in the form of water pollution. The figure above illustrates the market for leather. In the absence of any government regulation, how many tons of leather will be produced?
A) 0 tons B) 200 tons C) 300 tons D) more than 300 tons E) None of the above answers is correct.
Which of the following would likely take the longest time to enact?
A) Federal government fiscal policy that strives for a balanced budget B) The Fed's lowering of the discount rate C) The Fed's raising of the discount rate D) The Fed's engagement in open market operations
Assume both the demand for beef and the supply of beef decrease. Which of the following outcomes is certain to occur?
A. The equilibrium quantity of beef will rise. B. The equilibrium quantity of beef will fall. C. The equilibrium price of beef will fall. D. The equilibrium price of beef will rise.