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The Markets for the Factors of Production 4519
110. Refer to Table 18-1. Suppose that the firm pays its workers $50 per day. Each unit of output
sells for $20. How many days of labor should the firm hire?
a. 3
b. 4
c. 5
d. 6
Table 18-2
Quantity of Labor
Number of Bracelets Per
Week
0
0
1
200
2
360
3
480
4
560
5
600
111. Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week
by various numbers of workers. If the price per bracelet in a perfectly competitive product
market is $8, how many workers would the firm employ if the weekly wage rate is $800?
a. 1
b. 2
c. 3
d. 4
4520 The Markets for the Factors of Production
112. Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week
by various numbers of workers. If the price per bracelet in a perfectly competitive product
market is $5, how many workers would the firm employ if the weekly wage rate is $375?
a. 1
b. 2
c. 3
d. 4
113. Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week
by various numbers of workers. If the price per bracelet in a perfectly competitive product
market is $10, how many workers would the firm employ if the weekly wage rate is $375?
a. 2
b. 3
c. 4
d. 5
The Markets for the Factors of Production 4521
114. Refer to Table 18-2. The table shows the number of bracelets that can be assembled per week
by various numbers of workers. If the price per bracelet in a perfectly competitive product
market is $2.50, how many workers would the firm employ if the weekly wage rate is $375?
a. 2
b. 3
c. 4
d. 5
Table 18-3
Number of
Workers (L)
Output of Firm A
Output of Firm B
Output of Firm C
Output of Firm D
1
200
200
200
200
2
160
380
600
400
3
120
540
1,200
600
4
80
680
2,000
800
115. Refer to Table 18-3. Which firm’s production function exhibits constant marginal product?
a. Firm A
b. Firm B
c. Firm C
d. Firm D
4522 The Markets for the Factors of Production
116. Refer to Table 18-3. Which firm’s production function exhibits positive but diminishing
marginal product?
a. Firm A
b. Firm B
c. Firm C
d. Firm D
117. Refer to Table 18-3. Which firm’s production function exhibits negative marginal product?
a. Firm A
b. Firm B
c. Firm C
d. Firm D
The Markets for the Factors of Production 4523
118. Refer to Table 18-3. For Firm A, the marginal product of labor is
a. increasing.
b. constant.
c. decreasing.
d. negative.
119. Refer to Table 18-3. For Firm B, the marginal product of labor is
a. increasing.
b. constant.
c. decreasing.
d. negative.
4524 The Markets for the Factors of Production
120. Refer to Table 18-3. For Firm C, the marginal product of labor is
a. increasing.
b. constant.
c. decreasing.
d. negative.
121. Refer to Table 18-3. For Firm D, the marginal product of labor is
a. increasing.
b. constant.
c. decreasing.
d. negative.
Table 18-4
Labor
Output
Marginal
Product of
Labor
Value of
Marginal
Product of
Labor
Wage
Marginal
Profit
0
0
---
---
---
---
1
400
400
$1200
$800
$400
2
700
300
$ 900
$800
$100
3
950
250
$ 750
$800
-$50
4
1050
100
$ 300
$800
-$500
The Markets for the Factors of Production 4525
122. Refer to Table 18-4. The price of output is
a. $400.
b. $3.
c. $2.
d. $1.
123. Refer to Table 18-4. How many workers should the firm hire?
a. 1
b. 2
c. 3
d. 4
Table 18-5
Labor
Output
Marginal
Product of
Labor
Value of
Marginal
Product of
Labor
Wage
Marginal
Profit
0
0
---
---
---
---
1
400
400
$800
$450
$350
2
700
300
$600
$450
$150
3
950
250
$500
$450
$50
4
1050
100
$200
$450
-$250
4526 The Markets for the Factors of Production
124. Refer to Table 18-5. The price of output is
a. $1
b. $2.
c. $3.
d. $4.
125. Refer to Table 18-5. How many workers should the firm hire?
a. 1
b. 2
c. 3
d. 4
Table 18-6
Labor
Output
Marginal
Product of
Labor
Value of
Marginal
Product of
Labor
Wage
Marginal
Profit
0
0
---
---
---
---
1
300
300
$600
$300
$300
2
500
200
AA
$300
$100
3
600
100
$200
$300
BB
4
650
CC
DD
$300
-$200
The Markets for the Factors of Production 4527
126. Refer to Table 18-6. What is the value for the cell labeled AA?
a. $600
b. $500
c. $400
d. $300
127. Refer to Table 18-6. What is the value for the cell labeled BB?
a. $300
b. $200
c. $100
d. −$100
128. Refer to Table 18-6. What is the value for the cell labeled CC?
a. 650
b. 600
c. 100
d. 50
4528 The Markets for the Factors of Production
129. Refer to Table 18-6. What is the value for the cell labeled DD?
a. −$100
b. $300
c. $100
d. $50
Table 18-7
Number of
Workers
Output
Marginal
Product of Labor
Value of Marginal
Product of Labor
Wage
Marginal
Profit
0
0
--
--
$500
--
1
100
AA
$1,000
$500
$500
2
BB
80
$ 800
$500
CC
3
DD
60
EE
$500
$100
4
280
FF
$ 400
$500
GG
5
HH
20
II
$500
JJ
130. Refer to Table 18-7. What is the market price of the final good?
a. $5
b. $6
c. $8
d. $10
The Markets for the Factors of Production 4529
131. Refer to Table 18-7. It is apparent from this table that increasing marginal product
a. occurs only after the first worker is hired.
b. occurs only after the second worker is hired.
c. occurs only after the third worker is hired.
d. never occurs.
132. Refer to Table 18-7. What is the value for the cell labeled BB?
a. 80 units
b. 100 units
c. 180 units
d. 200 units
133. Refer to Table 18-7. What is the value for the cell labeled FF?
a. 30
b. 40
c. 100
d. 400
4530 The Markets for the Factors of Production
134. Refer to Table 18-7. The fact that the marginal product falls as the number of workers
increases illustrates a property called
a. diminishing marginal product.
b. utility maximization.
c. supply and demand.
d. labor theory.
135. Refer to Table 18-7. The fact that the production function exhibits diminishing marginal
productivity implies that
a. total production decreases beyond a certain level of output.
b. labor markets are not always competitive.
c. the additions to total output get smaller as more workers are hired.
d. marginal profit is negative.
The Markets for the Factors of Production 4531
136. Refer to Table 18-7. What is the value of the cell labeled GG?
a. $400
b. $100
c. $0
d. −$100
137. Refer to Table 18-7. What is the value of the cell labeled II?
a. -$100
b. $100
c. $200
d. $300
138. Refer to Table 18-7. What is the value of the cell labeled JJ?
a. -$300
b. -$200
c. -$100
d. $0
4532 The Markets for the Factors of Production
139. Refer to Table 18-7. To maximize its profit, how many workers will the firm hire?
a. 2
b. 3
c. 4
d. 5
140. Refer to Table 18-7. To maximize its profit, the firm will hire workers as long as the value of
the marginal product of labor equals or exceeds
a. $100.
b. $200.
c. $400.
d. $500.
The Markets for the Factors of Production 4533
Table 18-8
Harold and Maude own a dance studio where they and their employees teach ballroom dancing.
Their company is a competitive, profit-maximizing firm. Harold and Maude’s production function
is detailed in the table below.
Labor
(# of workers)
Output
(in number of
students per
day)
0
0
1
90
2
170
3
220
4
250
5
270
141. Refer to Table 18-8. What is the marginal product of the third worker?
a. 220 students
b. 73.33 students
c. 50 students
d. 30 students
4534 The Markets for the Factors of Production
142. Refer to Table 18-8. What is the marginal product of the fourth worker?
a. 250 students
b. 62.5 students
c. 50 students
d. 30 students
143. Refer to Table 18-8. If Harold and Maude pay their workers $80 per day and charge $20 per
dance lesson, what is the value of the marginal product of the second worker?
a. $400
b. $800
c. $1,600
d. $4,800
The Markets for the Factors of Production 4535
144. Refer to Table 18-8. If Harold and Maude pay their workers $80 per day and charge $20 per
dance lesson, what is the value of the marginal product of the third worker?
a. $400
b. $800
c. $1,000
d. $1,600
145. Refer to Table 18-8. If Harold and Maude offer a special sale for one day where dance
lessons are $5 each, and if they pay their workers $200 per day for that day, what is the
maximum number of workers that they will hire for that day?
a. 1
b. 2
c. 3
d. 4
4536 The Markets for the Factors of Production
Table 18-9
The following table shows the production function for a particular business. The numbers
represent the various labor and output combinations the firm may choose for its output on a daily
basis.
Labor
Output
0
0
1
70
2
130
3
180
4
220
5
250
146. Refer to Table 18-9. What is the marginal product of the third unit of labor?
a. 40 units
b. 50 units
c. 60 units
d. 180 units
147. Refer to Table 18-9. What is the marginal product of the fourth unit of labor?
a. 40 units
b. 50 units
c. 60 units
d. 180 units
The Markets for the Factors of Production 4537
148. Refer to Table 18-9. What is the marginal product of the fifth unit of labor?
a. 30 units
b. 40 units
c. 50 units
d. 250 units
149. Refer to Table 18-9. Suppose this firm charges a price of $5 per unit of output and pays
workers a wage equal to $160 per day. What is the value of the marginal product of labor for the
second worker?
a. $300
b. $650
c. $9,600
d. $20,800
4538 The Markets for the Factors of Production
150. Refer to Table 18-9. Suppose this firm charges a price of $5 per unit of output and pays
workers a wage equal to $160 per day. What is the value of the marginal product of labor for the
third worker?
a. $90
b. $250
c. $300
d. $800
151. Refer to Table 18-9. Suppose this firm charges a price of $5 per unit of output and pays
workers a wage equal to $160 per day. What is the value of the marginal product of labor for the
fourth worker?
a. $200
b. $1,000
c. $6,400
d. $32,000
