Refer to the Total Product Curve Shown in the Graph

question 83

Multiple Choice

Refer to the total product curve shown in the graph, and assume a competitive labor market. If the firm can sell widgets for $12, then what is the maximum amount it will pay the fourth worker each day?

• A)$24
• B)$48
• C)$61
• D)$732

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Definitions:

Transfers

Transactions where wealth or income is redistributed from one party to another without any exchange of goods or services, such as grants or social security payments.

Households

Units of one or more persons living together who make joint decisions on consumption, work, and income generation.

Discrimination Coefficient

A measure in economics and social sciences to quantify the degree of discrimination or bias shown towards or against a particular group or individual.

Wage Differential

The difference between the wage received by one worker or group of workers and that received by another worker or group of workers.