1.For any firm in any market structure, a factor's marginal revenue product is

a.the average product of the factor multiplied by the price of the output.

b.the change in revenue caused by the sale of the product contributed by an additional unit of input.

c.the change in revenue caused by the sale of an additional unit of output.

d.the increase in output resulting from the use of an additional unit of the factor multiplied by the cost of that factor.

e.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.$6.

b.$36.

c.$48.

d.$72.

e.$96.

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.MRP = MP p

b.MR =

c.MC = MR w

d.w = MP p

e.MRP = MR MC

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.$1.20.

b.$4.44.

c.$64.

d.$80.

e.$144.

5.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

6.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

b.more; less than

c.less; greater than

d.less; less than

e.no; equal to

7.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.$16; less

d.$16; more

e.$0; no

8.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

b.more; less than

c.less; greater than

d.less; less than

e.no; equal to

9.Consider labour hired for $1000 per week. If the last week of labour hired produces 0.25 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

b.more; less than

c.less; greater than

d.less; less than

e.no; equal to

10.Consider a small firm that is producing winter jackets. It can lease an additional sewing machine for one month for $750. With this additional machine, the 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; lease1.For any firm in any market structure, a factor's marginal revenue product is

a.the average product of the factor multiplied by the price of the output.

b.the change in revenue caused by the sale of the product contributed by an additional unit of input.

c.the change in revenue caused by the sale of an additional unit of output.

d.the increase in output resulting from the use of an additional unit of the factor multiplied by the cost of that factor.

e.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.$6.

b.$36.

c.$48.

d.$72.

e.$96.

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.MRP = MP p

b.MR =

c.MC = MR w

d.w = MP p

e.MRP = MR MC

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.$1.20.

b.$4.44.

c.$64.

d.$80.

e.$144.

5.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

6.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

b.more; less than

c.less; greater than

d.less; less than

e.no; equal to

7.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.$16; less

d.$16; more

e.$0; no

8.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

b.more; less than

c.less; greater than

d.less; less than

e.no; equal to

9.Consider labour hired for $1000 per week. If the last week of labour hired produces 0.25 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

b.more; less than

c.less; greater than

d.less; less than

e.no; equal to

10.Consider a small firm that is producing winter jackets. It can lease an additional sewing machine for one month for $750. With this additional machine, the 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