Use the Accompanying Graph, Which Depicts Mighty Max's Labor Demand

question 114

Multiple Choice

Use the accompanying graph, which depicts Mighty Max's labor demand for his duffle-bag business, to answer the questions that follow.

-If the wage of the fifth worker is $20 and her value of the marginal product of labor is $5,the firm:

• A) benefits by stopping at this level of labor.
• B) is likely to fire the fifth worker.
• C) asks this fifth worker to work overtime.
• D) benefits by hiring more workers.
• E) is likely to lose profit by hiring more workers.

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Definitions:

Product Line

A group of related products marketed under a single brand name by the same company, often catering to different customer needs or preferences.

Meeting

A gathering of individuals for the purpose of discussing issues, making decisions, or exchanging information.

Creative Problem Solving

An approach to finding innovative solutions to complex problems through creativity, thinking outside the box, and exploring unconventional approaches.

Alternatives

Other options or choices available in a decision-making process.