The Figure Below Depicts a Production Function for a Firm

question 59

Essay

The figure below depicts a production function for a firm that produces cookies.
Figure 12-4
-The Hardboard Construction Company hired Bob at $10 an hour, but its output of doll houses only increased by three units a day. Two weeks later, the company purchased an $8 hammer for Bob and output increased by twelve units. Since the hammer increased the marginal product more than Bob did, and at less cost, Hardboard fired Bob. Is this consistent with the theory of marginal productivity? Why or why not?

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Definitions:

Cognitive Development

The process by which individuals perceive, think, and gain understanding of their world through the interaction and influence of genetic and learned factors.

Object Permanence

The understanding that objects continue to exist even when they cannot be observed, a concept developed during the sensorimotor stage of cognitive development.

Indifferent Parenting Style

A style of parenting characterized by a lack of responsiveness to a child's needs; parents who are indifferent often neglect emotional support.

Recessive Gene

A gene that must be present in two copies (one from each parent) to express a particular trait, overshadowed when a dominant gene is present.