Refer to the information provided in Figure 7.6 below to answer the question(s) that follow. 
Figure 7.6Refer to Figure 7.6. The shoe manufacturer currently produces 50 units of output. If this shoe manufacturer increases labor from 15 to 20, the marginal product of the 20th worker
A. is zero, as the total number of shoes produced remains at 50.
B. is 8.5, as capital can be reduced by 8.5 units when the 20th worker is hired.
C. cannot be determined because output remains constant.
D. cannot be determined because both capital and labor have been increased.
Answer: C
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A consultant interviews the hiring manager of a small, profit-maximizing firm. The manager explains that the firm used to have 15 employees but decided not to rehire when the most-recently-hired employee left the company, so the firm now has 14 employees. We can infer that
a. for the 15th employee, the wage exceeded the value of the marginal product of labor. b. for the 15th employee, the value of the marginal product of labor exceeded the wage. c. the firm is too small and should rehire to replace the 15th employee. d. the firm is no longer attempting to maximize profits.
The following accompanying table shows the relationship between the speed of a computer's CPU and its benefits and costs. Assume that all other features of the computer are the same (that is, CPU speed is the only source of variation), and only the CPU speeds listed below are available for purchase. CPU GHzTotal BenefitMarginal BenefitTotal CostMarginal Costs2.0$1,000 $900 2.5$1,400 $1003.0 $300$1,200 3.5$1,900 $1,500 4.0$2,000 $400 Application of the Cost-Benefit Principle would lead one to purchase a ________ computer.
A. 3.0GHz B. 4.0GHz C. 2.0GHz D. 2.5GHz
Prior to the industrial revolution, except for a few rich families, everyone was _________.
Fill in the blank(s) with the appropriate word(s).
Refer to the accompanying figure. Total producer surplus in this market is:
A. $10 B. $125 C. $500 D. $250