Suppose That You Run a House-Painting Company and Currently Have

question 16

Multiple Choice

Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month.If you hire a third worker,6 houses can be painted per month.If you hire a fourth worker,9 houses can be painted,and a fifth and sixth worker will increase the number of houses painted to 13 and 15,respectively.Diminishing returns

• A)set in when the fourth worker is hired.
• B)set in when the fifth worker is hired.
• C)set in when the sixth worker is hired.
• D)have not yet set in because output is still increasing.

Recognize the conditions under which a good will be produced based on societal valuation and firm costs.

Identify the derived demand for inputs based on output demand.

Understand the impact of product demand and price changes on the MRP curve.

Explain the implications of perfectly competitive labor and product markets on marginal revenue product and hiring decisions.