1.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

2.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 Units of the Factor

Total Number of Units of Output

Price per Unit

of Output

10

20

$10

11

44

$10

12

64

$10

13

78

$10

14

84

$10

15

86

$10

Table 1

3.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.

4.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.

5.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.

6.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.

7.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.

8.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

9.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 Units of the Factor

Total Number of Units of Output

2

100

3

110

4

128

5

148

6

162

7

170

8

166

Table 2

10.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.