Suppose That All Workers Place a Value on Their Leisure

question 30

Multiple Choice

Suppose that all workers place a value on their leisure of 75 goods per day. The production function relating output per day Y to the number of people working per day N is Y = 500N - 0.4N² and the marginal product of labour is MPN = 500 - 0.8 N. A 25% tax is levied on wages. Output per day would be

• A) 100,000.
• B) 150,000.
• C) 200,000.
• D) 250,000.