You Have Been Hired by a Data Processing Firm to Provide

question 11

Multiple Choice

You have been hired by a data processing firm to provide economic advice. The owner of the firm tells you that the firm's only variable input is the number of data-entry operators. The hourly wage for data-entry operators is $10.00. The marginal revenue product curve for data-entry operators reaches its maximum at three workers with a marginal revenue product of $12.00. What advice would you give this firm?

• A) Hire three data-entry operators so as to maximize profits.
• B) Shut down immediately, as the firm is not able to cover all of its variable costs.
• C) Decrease the wage rate paid to data-entry operators so that their marginal revenue product will decrease.
• D) Hire data-entry operators until the marginal revenue product is equal to the wage-which will occur when more than three operators are employed.

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Definitions:

Chemoreceptors

Sensory receptors in the body that respond to chemical stimuli, such as taste or smell.

Middle Ear

The air-filled central cavity of the ear, behind the eardrum, containing the three smallest bones in the body that are involved in the transmission of sound vibrations.

Stapes

The smallest bone in the human body, located in the middle ear, playing a critical role in the conduction of sound vibrations to the inner ear.

Oval Window

A membrane-covered opening that leads from the middle ear to the inner ear, playing a key role in the mechanics of hearing.