A Competitive Firm Sells Its Output for $60 Per Unit

question 131

Multiple Choice

A competitive firm sells its output for $60 per unit. Assume that labor is the only input that varies for the firm. The marginal product of the 10th worker is 20 units of output per day; the marginal product of the 11th worker is 16 units of output per day. The firm pays its workers a wage of $150 per day. For the 11th worker, the value of the marginal product of labor is

• A)$480.
• B)$960.
• C)$1,200.
• D)$2,400.

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Definitions:

Homeostasis

The self-regulating process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.

Steady State

A condition in which all aspects of a system are in equilibrium or unchanging over time, often used in physics and economics to describe stable systems.

William McDougall

An influential psychologist known for his work on social psychology, including the concept of the group mind and the role of instinct in human behavior.

Psychoanalytic Theory

A set of theories originated by Sigmund Freud, which focus on the unconscious mind and childhood experiences as determinants of an individual's psychological state and behavior.