A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of wheat is $2 a bushel, the wage rate is $10, the farmer employs five workers and the marginal product of the fifth worker is 3 bushels. What would you advise this farmer to do?
A. Do nothing because the wage rate and the marginal product of the last worker hired are equal.
B. Reduce employment because the wage paid is more than the marginal revenue product.
C. Reduce the product price so that the wage and marginal revenue product will be equal.
D. Increase employment because the wage paid is less than the marginal revenue product.
Answer: B
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Which of the following statements is NOT true about using per capita real GDP to measure a nation's economic growth?
A) The definition does not indicate how the increase in growth is being disturbed among the nation's population. B) The definition assumes that some of the increase in productivity goes to the poor. C) The definition is not perfect for measuring increases in a nation's productive capacity. D) The definition has understated actual economic growth because it does not take into consideration changes in leisure.
Even though points inside a production possibilities curve are attainable, why are they not preferred?
What will be an ideal response?
In the banking system of the United States, banks that wish to borrow to make up reserve deficiencies must turn to the federal funds market
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of a product sold by an undifferentiated oligopoly?
a. steel b. automobile c. a new drug d. breakfast cereal