Suppose the Only Employer in a Remote Alaskan Village Is

question 96

Multiple Choice

Suppose the only employer in a remote Alaskan village is a salmon fishing company, which faces a positively sloped labor supply curve. If ten workers are hired, the wage rate is $25 per hour, but to hire the eleventh worker, the wage rate needs to increase to $27 per hour. What is the marginal factor cost of the eleventh worker?

• A) $25
• B) $27
• C) $47
• D) $297

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Definitions:

Drive-Reduction Theory

A theory in psychology that posits the reduction of physiological needs is a primary motivator for behavior.

Tension Reduced

A state or process whereby physiological or psychological tension is decreased.

Stability

The state or quality of being stable; firmness in position.