Question Table 1 Consider the following daily production data for MadeFromScratch, Inc. M

04 Jun Question Table 1 Consider the following daily production data for MadeFromScratch, Inc. M

Question
Table 1

Consider the following daily production data for MadeFromScratch, Inc. MadeFromScratch sells cupcakes for $2 each and pays the workers a wage of $325 per day.

Labor (number of workers)

Quantity (cupcakes per day)

Marginal Product of Labor (cupcakes per day)

Value of the Marginal Product of Labor

Wage (per day)

Marginal Profit

0

0

$325

1

200

$325

2

380

$325

3

540

$325

4

680

$325

5

800

$325

6

900

$325

1. Refer to Table 1. What is the third worker’s marginal product of labor?

a. 120 cupcakes

b. 140 cupcakes

c. 160 cupcakes

d. 180 cupcakes

2.Refer to Table 1. What is the fourth worker’s marginal product of labor?

a. 120 cupcakes

b. 140 cupcakes

c. 160 cupcakes

d. 180 cupcakes

3. Refer to Table 1. What is the fifth worker’s marginal product of labor?

a. 120 cupcakes

b. 140 cupcakes

c. 160 cupcakes

d. 180 cupcakes

4. Refer to Table 1. What is the sixth worker’s marginal product of labor?

a. 100 cupcakes

b. 120 cupcakes

c. 140 cupcakes

d. 160 cupcakes

5. Refer to Table 1 What is the value of the marginal product of the first worker?

a. $200

b. $400

c. $500

d. $700

6. Refer to Table 1. What is the value of the marginal product of the second worker? .

a. $180

b. $360

c. $450

d. $720

7. Refer to Table 1. What is the value of the marginal product of the fifth worker?

a. $120

b. $240

c. $300

d. $1,600

8. Refer to Table 1. The marginal product of labor begins to diminish with the addition

of which worker?

a. the 1st worker

b. the 2nd worker

c. the 3rd worker

d. the 4th worker

9. Refer to Table 1. What is the marginal profit of the fourth worker?

a. $280

b. $25

c. –$5

d. –$45

10. Refer to Table 1. What is the marginal profit of the sixth worker?

a. $100

b. -$50

c. -$75

d. -$125

12. Refer to Table 1. Assuming MadeFromScratch is a competitive, profit-maximizing firm, how many workers will the firm hire?

a. 2 workers

b. 3 workers

c. 4 workers

d. 5 workers

13. Refer to Table 1. Assume that MadeFromScratch is a competitive, profit-maximizing firm. If the market price of cupcakes increases from $2.00 to $2.50, how many workers would the firm then hire?

a. 2 workers

b. 3 workers

c. 4 workers

d. 5 workers

14. Refer to Table 1. Suppose that there is a technological advance that allows MadeFromScratch employees to

produce more cupcakes than they could before. Because of this change, the firm’s

a. demand for labor shifts right.

b. demand for labor shifts left.

c. supply of labor shifts right.

d. supply of labor shifts left.

15. Refer to Table 1. Suppose that the firm suffers a loss of some of their technology such as the theft of their industrial mixers. After the theft, MadeFromScratch employees produce fewer cupcakes than they could before because they must mix the cupcake batter by hand rather than using the high-speed mixers. Because of this change, the firm’s

a. demand for labor shifts right.

b. demand for labor shifts left.

c. supply of labor shifts right.

d. supply of labor shifts left.

16. Which of the following is most likely an inferior good?

a. an antique car

b. gasoline

c. a bus ticket

d. an airline ticket

17. A good is an inferior good if the consumer buys more of it when

a. his income rises.

b. the price of the good falls.

c. the price of a substitute good rises.

d. his income falls.

18. Pepsi and pizza are normal goods. When the price of pizza rises, the substitution effect causes Pepsi to be relatively

a.more expensive, so the consumer buys more Pepsi.

b.more expensive, so the consumer buys less Pepsi.

c.less expensive, so the consumer buys more Pepsi.

d.less expensive, so the consumer buys less Pepsi.

19. You can think of an indifference curve as an