If Two Workers Can Produce 22 Units of Output, and the Addition

question 162

Multiple Choice

If two workers can produce 22 units of output, and the addition of a third worker increases output to 30 units, the marginal product of the third worker is

• A) 8 units.
• B) 10 units.
• C) 22 units.
• D) 30 units.

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Definitions:

Socially Optimal Price

A price level for goods or services that considers the wellbeing of society as a whole, often factoring in externalities.

Deadweight Loss

The diminishing of economic efficiency when equilibrium in the free market for a product or service is not attained.

Benevolent

Showing kindness or goodwill, often characterized by acts of generosity or concern for others.

Monopoly Firm

A business that is the sole provider of a good or service in a market, facing no competition, which can lead to higher prices and inefficiencies.