A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired; 32 when two workers are hired; 37 when three are hired; and 40 when four are hired. The farmer's product sells for $3 per unit and the wage rate is $13 per worker. The marginal product of the second worker is
A. 5.
B. 24.
C. 8.
D. 1.
Answer: C
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When a government taxes the sale of beer, cooperative surplus ________ and society gets ________
A) increases; richer B) increases; poorer C) decreases; richer D) decreases; poorer
In monopolistic competition, when firms make an economic profit
A) the existing firms continue to make an economic profit in the long run because of product differentiation. B) new firms enter the industry so that the price falls and the economic profit eventually falls to zero. C) new firms enter the industry so that output decreases and the economic profit increases. D) new firms enter the industry so that output increases and the economic profit increases.
According to economic liberalism, the regulating force of the economy is
a. self-interest. b. laissez-faire. c. competition. d. the government.
The widespread, but not universal, consensus among economists would be to respond to
A) an adverse supply shock with an accommodating policy. B) an adverse supply shock with an extinguishing policy. C) an adverse demand shock with a policy to offset the shock. D) all of the above.