Harry owns a barber shop and charges $6 per haircut. By hiring one barber at $10 per hour, the shop can provide 24 haircuts per eight-hour day. By hiring a second barber at the same wage rate, the shop can now provide a total of 42 haircuts per day. Harry should
A. not hire the second barber because he is less productive than the first barber.
B. hire the second barber because he will add $108 to profits.
C. not hire the second barber because he will diminish profits.
D. hire the second barber because he will add $28 to profits.
Answer: D
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Which of the following statements was probably made by an adherent of rational expectations? a. It is rational to pursue any full employment policy because more employment is better than less
b. Unemployment is clearly a case of market failure. c. Programs designed to stimulate employment will only stimulate the price level with no employment gain. d. It is inhumane to have a single person unemployed whatever the inflation cost.
A monopoly firm operates with declining marginal cost. If regulators impose marginal cost pricing, the market will
a. remain a monopoly but behave like a perfectly competitive industry. b. become perfectly competitive. c. be entered by additional firms but will not necessarily become perfectly competitive. d. be exited by the existing firm if the regulators will let the firm leave the market.
Which international relations theory supports the idea that it wouldn't matter who the hegemon is in a new world system?
a. constructivist theory b. realist theory c. feminist theory d. liberal theory
If G = $800 billion, tax receipts = $850 billion, and there is an inflationary gap of $100 billion, there is
A. a budget surplus. B. a budget deficit. C. not enough information to determine whether there is a budget surplus or a budget deficit.