Chuckie's Pizza Palace produces gourmet pizzas that sell for $20 each. Assume that labor is the only input that varies for the firm. If Chuckie hires 10 workers, he can produce and sell 600 pizzas per week. If he hires 11 workers, he can produce and sell 650 pizzas per week. Chuckie pays each of his workers $400 per week. Which of the following is correct?
a. For the 11th worker, the marginal profit is $1,000.
b. For the 11th worker, the marginal revenue product is $1,000.
c. The firm is maximizing its profit.
d. If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.
b
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Supply and demand analysis
a. can be used to understand solutions to pollution, but not causes. b. can be used to analyze how externalities lead to environmental problems. c. cannot be used to analyze pollution, which is a physical and chemical problem. d. cannot be used to solve the pollution problem, but can be used to analyze it.