Suppose the Marginal Physical Product of Labor at a Shoe

question 178

Multiple Choice

Suppose the marginal physical product of labor at a shoe string factory is 1,500 shoestrings per hour at 80 hours, 1,200 per hour shoestrings at 90 hours, 800 shoestrings per at 100 hours, and 300 shoestrings per hour at 110 hours.If a shoestring maker's wages are $60 per hour and each string sells for $0.05.What is the optimal use of labor for making shoestrings?

• A)80 hours
• B)90 hours
• C)100 hours
• D)110 hours

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Definitions:

CCA Class

In tax terminology, specifically for Canadian taxation, a system categorizing business assets for the purpose of depreciation calculation.

Turret Lathe

A type of lathe that allows multiple machining operations, like drilling and cutting, to be performed sequentially on a workpiece without repositioning it.

After-Tax Cost of Debt

The net cost of debt after the effects of income tax deductions on interest payments are considered.

Corporate Tax Rate

The percentage of a corporation's income that it pays as taxes to the government.