You have been hired by a data processing firm to provide economic advice. The owner of the firm tells you that the firm's only variable input is the number of data-entry operators. The hourly wage for data-entry operators is $15.00. The marginal revenue product curve for data-entry operators reaches its maximum at three workers with a marginal revenue product of $12.00. What advice would you give this firm?
A. Shut down immediately, as the firm is not able to cover all of its variable costs.
B. Increase the wage rate paid to data-entry operators so that their marginal revenue product will increase.
C. Produce as much as possible so as to maximize the difference between the wage paid to data-entry operators and their marginal revenue product.
D. Hire three data-entry operators so as to minimize the amount of money the firm will lose.
Answer: A
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According to the text, because people in an urban-industrial society will always disagree to some extent about who ought to have which rights,
A) it is unreasonable to expect negative externalities to be completely eliminated. B) negative externalities cannot be reduced without government coercion. C) negative externalities should not be thought of as the consequence of disagreement over property rights. D) there is no point in discussing the matter. E) we must depend upon government to decide exactly what should be prohibited or commanded.
Why are indifference curves convex to the origin?
What will be an ideal response?
Which of the following is NOT an advantage of a proprietorship?
A) They are easy to form and dissolve. B) Decision-making resides with one person—the owner. C) Liability of the owner is unlimited. D) Profits are only taxed once.
Refer to the information provided in Table 13.1 below to answer the question(s) that follow. Table 13.1Price ($)Quantity4.002,0003.502,4003.002,8002.503,2002.003,6001.504,0001.004,400Refer to Table 13.1. If a monopoly faces the demand schedule given in the table and has a constant marginal and average cost of $1 per unit of providing the product, what is the maximum profit the monopoly can earn?
A. $4,800 B. $5,600 C. $6,000 D. $8,400