Number of workersUnits of output0012525539541255150Table 8.2Refer to Table 8.2, which gives a firm's production function. Assume that all non-labor inputs are fixed. The marginal product is maximized when the firm hires:
A. 2 workers.
B. 3 workers.
C. 4 workers.
D. 5 workers.
Answer: B
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Problems with the federal government budget process include: a. tough choices to be made by Congress each year on which entitlement programs will receive full support. b. the constitutional requirement of Congress to balance the budget on an annual basis
c. an overly detailed budget that allows Congress to reward friends, thereby discouraging restraint on spending. d. a short review period for Congress that results in poor choices in funding programs. e. Congress having too much control over the budgetary process.
Which of the following is a definition of economic fluctuations?
a. Movements in prices around their long-run trend b. Shifts in the long-run trend of output c. Movements of the real wage over the long run d. Shifts in the long-run trend of prices e. Movements in output around its long-run trend
A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
A. sell foreign currency resulting from the exports of manufactured t-shirts. B. sell foreign currency resulting from the sale of a U.S. treasury bond. C. purchase foreign currency in order to import a BMW. D. purchase foreign currency in order to purchase a U.S. treasury bond.
When the inflation rate is expected to be zero, Steve wants to lend money if the interest rate is at least 4 percent per year, and Cindy wants to borrow money if the interest rate is no more than 4 percent per year. Steve and Cindy make a loan agreement for one year anticipating the inflation rate to be 2 percent. During the year, the inflation rate is actually 1 percent. As a result, ________.
What will be an ideal response?