Mary Is Considering Hiring Another Worker in an Assembly Line

question 301

Multiple Choice

Mary is considering hiring another worker in an assembly line for MP3 speakers. Mary knows the average product of labor is 15 speakers per day. She also believes that the next worker hired will produce an extra 12 speakers per day. A speaker sells for $10. Assuming that the market for speakers is perfectly competitive, Mary should hire another worker:

• A) only if the new worker's marginal product is 12 or more.
• B) only if the new worker's daily wage is $150 or less.
• C) only if the new worker's daily wage is $120 or less.
• D) since the marginal product is below the average product.

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Definitions:

Leakages

The outflow of economic resources or money from a system, such as savings, taxes, or imports, which can reduce domestic spending.

Reflectiveness

The ability or process of self-examination, exploring one's thoughts, feelings, and reasons behind one's actions.

Control Group

In scientific research, a group of subjects or entities kept under standard conditions to serve as a comparison against a group where experimental variables are altered.

Leakage

In economic terms, refers to the loss of funds through non-productive means, such as untaxed income or unrecorded sales.