Author Question: Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires ... (Read 117 times)

bucstennis@aim.com · **on:** Jun 29, 2018

Lynn owns Dust Bunnies, a cleaning company. In one week, she is able to clean 9 houses. If she hires an employee, together they are able to clean 15 houses per week.

If Lynn charges 100 to clean a house, and she pays her employee 400 a week, should she hire this employee? A) Yes, because the value of marginal product of the worker is less than the wage.
B) Yes, because the value of marginal product of the worker is greater than the wage.
C) No, because the value of marginal product of the worker is greater than the wage.
D) No, because the value of marginal product of the worker is less than the wage.

Question 2

A natural monopoly that is regulated to set its price according to the marginal cost pricing rule will

A) incur an economic loss.
B) maximize its profit.
C) produce a quantity of output such that price is above average total cost.
D) produce a quantity of output such that marginal cost is above average total cost.