A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $6 a bushel, the wage rate is $30, and the farmer employs eight workers. If the farmer is maximizing his profits, then the marginal product of the eighth worker is
A. 0.2 bushels.
B. 5 bushels.
C. 20 bushels.
D. indeterminate from the given information
Answer: B
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Suppose Barbara looks out in the morning and sees a clear sky so decides that a picnic for lunch is a good idea. Last night the weather forecast included a 100% chance of rain by midday but Barbara did not watch the local news program
Is Barbara's prediction of good weather at lunch time rational? Why or why not?
The various ways that vertical relationships can evade regulation include
a. tying the sale of a regulated good to a customer's choice of an unregulated good b. unbundling regulated and unregulated goods c. preventing the exclusion of rival unregulated goods d. exploiting differences in tax rates across jurisdictions
Mountain bikers and rollerbladers share the only trail in a city park. The city allows everyone into the park and onto the trail. The mountain bikers say the rollerbladers are a hazard to them; the rollerbladers say it's the other way around. Frequently there are collisions, and many injuries occur. What is the property rights problem?
a. Rollerbladers do not have mountain bikes. b. Bikers do not have rollerblades. c. No one owns both bikes and blades. d. No one has property rights to the use of the trail. e. No one owns the park.
An allocation of resources is Pareto optimal if
A. no further mutually beneficial exchange is possible. B. it is possible to make everyone else better off. C. it is possible to make one person better off without making at least some others worse off. D. it is below the contract curve.