1. For any firm in any market structure, a factor's marginal revenue product is a. b. the average product of the factor muitiplied by the price of the output. the change in revenue caused by the sale of the product contributed by an additional unit of input. the change in revenue caused by the sale of an additional unit of output. the increase in output resulting from the use of an additional unit of the factor multipiied by the cost of that factor. marginal revenue multiplied by total product. 2. Suppose the last unit of a factor of production employed has a marginal product of 12. The factor's price is $8, and the product's competitive market price is $6. This factor's marginal revenue product is a. s 9 9 P so $5. $3 $2 $5. 3. A condition for the profit-maximizing use of any factor of production is (where MP = marginal product, w = the price of a factor of production, p = price of one unit of the firm's output, MR = marginal revenue, MC = marginal cost, MRP = marginal revenue product): a. b. c. d. e. MRP=MPxp _MRP MR--?r MC=MRxw w=MPxp MRP=MRxMC 4. Consider labour that is hired for $18 per hour. If the last hour of labour hired produces 8 units of output which sells for $10 per unit, that labour-hour's marginal revenue product is a. e 9 9 F was 84M. %4 Sal $44 L . Consider labour that is hired for $18 per hour. If the last hour of labour hired produces 8 units of output which sells for $10 per unit; that labour-hour adds to the firm's profit and so labour should be hired. a. $80; more b. -$80; less c. $62; less d. $62; more e. $0; no . Consider labour that is hired for $18 per hour. If the last hour hired produces 8 units of output which sells for $2 per unit, labour should be hired in this situation since the wage is MRP. a. more; greater than more; less than less; greater than less; less than 9919.6 no; equal to . Consider labour that is hired for $18 per hour. If the last hour hired produces 8 units of output which sells for $2 per unit, that labour-hour adds to the firm's profit and so labour should be hired. a. -$128;more b. -$2; less c. 816; less d. $16; more e. $0; no . Consider labour hired for $18 per hour. If the last hour of labour hired produces 8 units of output which sells for $10 per unit, labour should be hired in this situation since the wage is MRP. a. more; greater than more; less than less; greater than less; less than $091.02: no; equal to . Consider labour hired for $1000 per week. If the last week of labour hired produces 0.25 L units of output which sells for $5000 per unit, labour should be hired in this situation since the wage is MRP. a. more; greater than more; less than less; greater than less; less than 9:21st no; equal to . Consider a small firm that is producing winterjackets. it can lease an additional sewing machine for one month for $750. With this additional machinethe firm can produce an additional 6 jackets during that time period that it sells for $125 each. Hiring the marginal machine adds to the firm's profit and so it should the machine. a. -$750;not lease b. -$750;lease c. $0; be indifferent as to whether to lease d. $750.-not lease e. $750;lease 11. Consider a small firm that is producing winter jackets. It can lease an additional sewing machine for one month for $1200. With this additional machine, the firm can produce an additional 7 jackets during that time period that it sells for $250 each. Hiring the marginal machine adds _ to the firm's profit and so it should _ the machine. a. -$1200; not lease b. $0; be indifferent as to whether to lease c. $1200; lease d. $550; lease e. $1750; lease 12. Consider a small firm that is producing winter jackets. It can lease an additional sewing machine for one month for $2400. With this additional machine, the firm can produce an additional 4 jackets during that time period that it sells for $550 each. Hiring the marginal machine adds _ to the firm's profit and so it should the machine. a. -$2400; not lease b. -$200; not lease c. $0; be indifferent as to whether to lease d. $200; lease e. $2400; lease Consider the following production and cost schedule for a firm. The first column shows the number of units of a variable factor of production employed by the firm. Total Number of Total Number of Price per Unit Units of the Factor Units of Output of Output 10 20 $10 11 44 $10 12 64 $10 13 78 $10 14 84 $10 15 86 $10 Table 1 13. Refer to Table 1. The marginal product of the 15th unit of the factor of production is a. -2. b. 0. c. 2. d. 82. e. 84. 14. Refer to Table 1. The marginal product of the 12th unit of the factor of production is a. 4. b. 14. C. 20. d. 44. e. 64. 15. Refer to Table 1. The total revenue of the output produced by 12 units of the factor is a. $120. b. $520. C. $640 d. $768. e. $1440.16. Refer to Table 1. The marginal revenue product of the 14th unit of the factor is a. -$60. b. $60. C. $140. d. $700. e. $840. 17. Refer to Table 1. The marginal revenue product of the 15th unit of the factor is a. -$20. b. $20. C. $60 d. $150. e. $820. 18. Refer to Table 1. Diminishing marginal returns are present for which units of the factor of production? a. 10th unit only b. 11th unit only c. 12th unit only d. 13th unit only e. all units shown in the table 19. Refer to Table 1. How many units of this factor of production would the profit-maximizing firm choose to hire? a. 11 b. 12 C. 13 d. 14 e. It is not possible to determine with the data provided. Consider the following table for a firm. The first column shows the number of units of a variable factor of production employed by the firm. Total Number of Total Number of Units of the Factor Units of Output 2 100 w 110 4 128 148 6 162 170 8 166 Table 2 20. Refer to Table 2. The marginal product of the 7th unit of the factor is a. -8. b. 0. C. 8 . d. 162. e. 170.21. Refer to Table 2. Suppose the firm is a perfect competitor and faces a given price of the product equal to $2 per unit. The marginal revenue product of the 5th unit of the factor is a. $128. $148. $20. $40. $2. 9.11.0? 22. Refer to Table 2. This firm begins to experience diminishing marginal productivity when it hires the unit of the factor. a. 3rd 4th 5th 6th 7th 99.0.6 23. Refer to Table 2. Suppose this firm is a perfect competitor and faces a given price of the product equal to $10 per unit. The marginal revenue product of the 3rd unit of the factor is a. $30. $100. $110. $1000. $1100. 9519.6 24. Refer to Table 2. Suppose this firm is a perfect competitor and faces a given price of the product equal to $15 per unit. The marginal revenue product of the 5th unit of the factor is a. $30. $100. $75. $300. 32220. 951.0? L" Consider the following production and cost schedule for a firm. The first column shows the number of units of a variable factor of production employed by the firm. Total Number of Total Number of Price per Unit Total Cost Units of the Factor Units of Out- ut of Out nut of Production 2 25. Refer to Table 3. The marginal product of the 4th unit of the factor of production is a. 4. b. 6. 8. . 26. 30. snap 26. Refer to Table 3. The marginal product of the 6th unit of the factor of production is a. -2. b. 2. 4. 8. 32. 9151.0 2?. Refer to Table 3. The total revenue obtained if the 5th unit of the factor of production is hired is a. $160. $180. $192. $202. $210. e e 9 Fr 28. Refer to Table 3. The rise in total revenue generated by hiring the 4th unit of the factor of production is a. '311.00. b. 32.00. 7 V J L c. $3.67. d. 37.50. e. $28.00. 29. Refer to Table 3. The increase in total revenue generated by hiring the 5th unit of the factor of production is a. -$11.00. b. -$Z.OD. c. $2.00. d. $7.50. a. $11.00. Diff:3 30. Refer to Table 3. A profit-maximizing firm would never hire more than the unit of this factor of production. a. 3rd 4th 5th 6th 7th s e 9 Fr