If hiring another worker would increase output by three units per hour, then to maximize profits the firm shouldĢ9) Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. If hiring another worker would increase output by five units per hour, then to maximize profits the firm shouldĪ) not change the number of workers it currently hires.ĭ) There is not enough information to answer the question.Ģ8) Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. What is the profit-maximizing quantity of labor that the firm should hire?Ģ7) Suppose a competitive firm pays a wage of $12 an hour and sells its product at $3 per unit.
The marginal profit from hiring the second unit of labor isĢ6) Refer to Table 17-2. The marginal revenue product of labor from the third unit of labor isĢ5) Refer to Table 17-2. The firm represented in the diagramĪ) has market power in the factor market.ī) has market power in the output market.Ĭ) has market power in both the factor and product market.ĭ) has no market power in the factor or product market.Ģ4) Refer to Table 17-2. 21) A firm's primary interest when it hires an additional worker isĪ) the cost of hiring the additional worker.ī) how the average output of the firm will be affected by this new worker.Ĭ) the extra revenue the firm realizes from hiring that worker.ĭ) whether or not the new worker gets along with the firm's existing workers.Ģ2) The firm's gain in profit from hiring another worker isĪ) the marginal revenue product of the extra worker.ī) the difference between marginal revenue product and the wage of the worker.ĭ) the reduction in costs from hiring another worker.Ģ3) Refer to Table 17-2.
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