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When Maxwell Fruit Drinks increases the number of workers it employs from 20 to 25,

 When Maxwell Fruit Drinks increases the number of workers it employs from 20 to 25,
                            its total labor costs rise from $10,000 to $15,000 a week. We know then that

a.Maxwell should never have hired the last five workers

b.Maxwell should continue hiring workers

c.diminishing returns have set in

d.the marginal revenue product curve is decreasing

e.the marginal labor cost is $1,000

72.              Virginia’s Ham Company is currently employing 100 workers at a wage of $6 per hour.
                            The firm produces 30 hams that sell for $12 each. The total labor cost per hour is

a.$180

b.$360

c.$600

d.$1,200

e.$3,000

73.              When a firm can hire all the labor it wants at the competitive market wage, the marginal
                            labor cost is equal to the

a.price of the output

b.total cost of labor

c.marginal physical product of labor

d.wage rate

e.change in labor employed

74.              When a firm is hiring the optimal amount of labor, the change in total labor cost divided
                            by the change in labor employed is equal to

a.one

b.the wage rate

c.the number of firms employing labor

d.the change in total revenue

e.the price of the good

75.              If the MRP of the 13th worker hired is $40 and the MLC of that worker is $34, the firm

a.lost money by hiring that worker

b.cannot hire that worker unless more capital is added to production, in which case the
firm will profit if the cost of the worker and capital is less than the revenue the
worker generates

c.profited only if price of the good increased

d.must have lost money on the 12 workers it hired prior to hiring this 13th worker

e.profited by hiring that worker

76.              The optimal number of workers hired by a firm in a competitive labor market is
                            determined by the quantity of labor associated with the following equation:

a.P = MRP

b.MPP = MRP

c.MRP = w

d.P = w

e.TLC = w

77.              When Lionel, an orange grower, hires Terry, Terry’s marginal physical product per hour
                            is 9 bushels of oranges. The price is $5 per bushel and the hourly wage rate is $55. We
                            know then that

a.orange growing is a profitable business

b.Terry creates a division of labor that adds not only output but profit for Lionel

c.the labor market is not competitive because price and the wage rate are not the same

d.Lionel should not have hired Terry

e.Terry’s marginal revenue product is greater than the wage rate

78.              The firm’s demand curve for labor is exactly the same as its

a.wage rate

b.price of the good

c.MRP curve

d.MPP curve

e.supply curve of labor

79.              Think totals: In a perfectly competitive labor market, the total labor cost curve, TLC

a.is upward sloping, and the marginal labor cost curve, MLC, is downward sloping

b.is downward sloping, and the marginal labor cost curve, MLC, is upward sloping

c.and the marginal labor cost curve, MLC, are both horizontal curves

d.is horizontal and the marginal labor cost curve, MLC, is upward sloping

e.is upward sloping, and the marginal labor cost curve, MLC, is horizontal

80.              Dogs are more popular than cats in the U.S., but if cats were to become the more popular
                            pet, then we can we expect that in the market for cat-food workers

a.MPP increases

b.MRP increases

c.MPP decreases

d.MRP decreases

e.the wage rate decreases

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