ID: A Name: Exhibit 11-7 3 4 Pounds of malgel jUnits of candy pldt labor 80 go 1

Question

ID: A Name: Exhibit 11-7 3 4 Pounds of malgel jUnits of candy pldt labor 80 go 150 30 3 | 0 C.11. Exhibit 11-7 shows data on the production of chocolate candy. If the firm sells chocolate regardless of the quantity sold, the marginal revenue product of the third worker is b. $6 $0.30 S3 e.$90 12. Marginal revenue product is a. b, c the additional cost of hiring one more unit of a resource calculated by multiplying marginal revenue by the price of a resource calculated by multiplying marginal revenue by the marginal resource cost of a resource change in total output that results from the employment of an additional unit of a the additional units of output generated by hiring one more unit of a resource the expected additional revenue generated by hiring one more unit of a e. 13. Marginal revenue product is defined as the a. change in total product that results from the employment of an additional unit of a resource b. change in total revenue that results from the employment of an additional unit of a resource d. e. change in resource employment that results from a change in total output change in marginal revenue that results from a change in the employment of an additional unit of a resource 14. A firm hires labor in a perfectly competitive labor market. If the wage rate is S44, the firm should hire a. 44 workers b. all units of labor whose marginal product is 44 c all units of labor whose marginal revenue product is $44 GD all units of labor whose marginal revenue product is greater than or equal to $44 e. all units of labor whose marginal revenue pes than or equal to $44 If the wage is below the marginal revenue product, then a profit-maximizing firm will 15. employ more workers b. employ fewer workers c. see an increase in its demand for labor d. see an increase in its supply of labor e see a fall in its demand for labor

Explanation / Answer

11. The right answer is option e. $90

Explanation: Marginal revenue product of a labor = marginal product of the labor * market price

The marginal product of the 3rd labor = 150 - 120 = 30 pounds

Market price = $3/pound.

So, marginal revenue product of the third labor = $3 * 30 = $90.

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