Table 18-7
the Table Displays Data for a Small, Competitive

question 146

Multiple Choice

Table 18-7
The table displays data for a small, competitive, profit-maximizing firm that produces and sells envelopes. Assume that labor is the only input that varies for the firm.
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$$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Labor } \\\text { (Number of workers) }\end{array} & \begin{array} { c } \text { Marginal Product of Labor } \\\text { (Boxes of envelopes per week) }\end{array} & \begin{array} { c } \text { Wage } \\\text { (Dollars per } \\\text { worker per week) }\end{array} \\\hline 0 & & \\\hline 1 & 133 & 393 \\\hline 2 & 111 & 393 \\\hline 3 & 93 & 393 \\\hline 4 & 83 & 393 \\\hline 5 & 75 & 393 \\\hline\end{array}$$ ​
-Refer to Table 18-7. Suppose the firm sells each box of envelopes that it produces for $5. The firm would not be interested in hiring a fifth worker unless the wage fell from its current level of $393 to what level?

• A)$386
• B)$380
• C)$376
• D)$375

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Definitions:

Halo Effect

The tendency of our general or overall liking for a person to influence our assessment of more specific traits of that person. The halo effect can produce inaccuracy in our ratings of others’ traits and performances.

Complexity-Extremity Effect

The bias where less complex schemas lead to more extreme judgments and evaluations.

Stereotypes

Fixed sets of characteristics that are attributed to all the members of a group; simplistic and rigid perceptions of members of one group that are widely shared by others.

Attribution Error

A cognitive bias that involves misattributing the causes of someone's behavior to their personality, rather than to situational factors.