Author Question: Refer to Table 8-3. Consider the data above (in billions of dollars) for an economy: Gross domestic ... (Read 22 times)

rmenurse · **on:** Jun 29, 2018

Refer to Table 8-3. Consider the data above (in billions of dollars) for an economy: Gross domestic product (in billions of dollars) for this economy equals

A) 2,200. B) 1,600. C) 1,400. D) 1,200.

Question 2

A manager of a small company makes the following statement We need to keep hiring additional workers up to the point where the marginal productivity of the last worker we hire is at its maximum.

This way we can maximize the total productivity of the firm. Critically evaluate this statement.

micaelaswann · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D

Answer to Question 2

This statement is false. The total product will be maximized when marginal productivity is zero. Even if the firm continues to hire workers long after the one with the maximum marginal productivity the firm will still see an increase in overall productivity if the additional workers still have a positive marginal productivity.