A Farmer Who Has Fixed Amounts of Land and Capital

question 148

Multiple Choice

A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The farmer's product sells for $3 per unit, and the wage rate is $13 per worker. How many workers should the farmer hire?

• A)$1
• B)$2
• C)$4
• D)$3

Differentiate between various market structures (pure competition, monopolistic competition, oligopoly, and monopoly) based on their defining characteristics.

Analyze the implications of being a price taker in a purely competitive market on a firm's pricing and output decisions.

Recognize the conditions under which a purely competitive firm will achieve profit maximization or reach a break-even point.

Identify the short-run supply curve of a purely competitive firm and its relation to marginal cost and average variable cost.

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