Practice- Assume that you sell churros in a perfectly competitive product market and hire workers in a perfectly competitive labor market. The price of churros is $4 and the wage is $10. Complete the table and answer the questions:

Units of Labor (L)	Total Product (Q)	Marginal Product (MP)	Product Price (P)	Total Revenue (TR)	Marginal Revenue Product (MRP)	Marginal Resource Cost (MRC)
0	0	-	$4	$0	-	-
1		4	$4
2		6	$4
3		4	$4
4	17		$4
5	19		$4
6		1	$4
7	19		$4

2- Why are your workers considered "wage takers"?

3- How many workers should you hire to maximize profit?

4- Assume that your fixed costs are $20. Calculate your profit or loss. Show your work.

5- As a result of the decrease in supply, will the MRP of the last worker hired by your firm increase, decrease, or stay the same?

6- Practice- Assume that you and Tommy are trying to decide how many workers and automated forklifts you need at your loading dock. The table below shows the total number of boxes that workers can load onto trucks per hour. Assume that forklifts are exactly three times more productive than workers and that workers cost $10 per hour and forklifts cost $15 per hour.

Complete the table.

Quantity of Workers	Total # of Boxes Loaded (Workers)	Marginal Product of Workers	MP per Dollar of Workers	Total # Boxes Loaded (Forklifts)	Marginal Product Forklifts	MP per Dollar for Forklifts
1	50			150
2	90
3	120
4	140
5	150

7- Explain why the marginal product of workers and forklifts decreases as more of each resources is hired.

8- Assume that you decide to spend a total of $80 on workers and forklifts. Tommy suggests that you hire five workers and two forklifts. Use the least-cost rule to explain why his suggestion is a mistake.

9- How many workers and how many forklifts should you hire to maximize your total output? Explain how you determined your answer.

10- How many total boxes would be loaded per hour if you hire the combination you identified in question #6? Show your work.