07 Jun uestion MICRO ECONOMICS 202 FALL 2014 — FINAL EXAM
uestion
MICRO ECONOMICS 202 FALL 2014 — FINAL EXAM
100 POINTS
I
MULTIPLE CHOICE — TWO POINTS EACH
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
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