Question 1
Suppose the last unit of a factor of production employed has a marginal product of 12. The factor's price is $8, and the product's competitive market price is $6. This factor's marginal revenue product is
◦ $96.
◦ $36.
◦ $48.
◦ $72.
◦ $6.
Question 2
The table below shows the total production for varying numbers of hours worked producing yo-yos. The firm sells its product and hires its workers in competitive markets.
Number of
Hours Worked | Number of
Yo-Yos
Produced | Wage Rate
per Hour (S) | Price of Yo-Yos
($) |
| 10 | 60 | 10 | 5 |
| 11 | 70 | 10 | 5 |
| 12 | 78 | 10 | 5 |
| 13 | 84 | 10 | 5 |
| 14 | 88 | 10 | 5 |
| 15 | 90 | 10 | 5 |
TABLE 13-4
Refer to Table 13-4. A profit-maximizing firm will continue to hire labour to produce yo-yos until they have equated
◦ the marginal revenue product of an additional hour of labour and the price of yo-yos.
◦ the wage rate per hour and the marginal product of labour.
◦ the marginal product of an additional hour of labour and the price of the yo-yos.
◦ the price of yo-yos and the wage rate per hour.
◦ the wage rate per hour and the value of the yo-yos produced by hiring one additional hour of labour.
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