To answer the question, refer to the following figure, showing the marginal revenue product (MRP) and the average revenue product (ARP) curves of a perfectly competitive firm hiring a single variable input, labor.
If the wage is $20, how many workers will the firm hire?
A. 200
B. 175
C. zero
D. 225
Answer: B
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Jane makes 1000 items a day. Each day she spends 8 hours producing those items. If hired elsewhere she could have earned $250 an hour. The item sells for $15 each. Production occurs seven days a week. If the explicit costs total $150,000 per month, what is her accounting profit?
a. $300,000 b. $60,000 c. $450,000 d. $240,000
A profit-maximizing firm will never hire that quantity of a factor of production for which that factor has an increasing marginal productivity because
a. it would not be maximizing output. b. it would not be maximizing the productivity of labor. c. it would not be minimizing costs. d. it would not be maximizing profits.
If the percentage change in quantity demanded is proportionately greater than the percentage change in price, the product is said to be;
(a) Elastic. (b) Perfectly Elastic. (c) Inelastic. (d) Unit Elastic.
_____________________________: A sale price adjustment must be made if the legal estate, or bundle of rights, of a comparable property differ from those of the subject property.
Fill in the blank(s) with the appropriate word(s).