Figure 18-3 The Figure Below Shows the Production Function for a Particular

question 215

Multiple Choice

Figure 18-3
The figure below shows the production function for a particular firm.
-Refer to Figure 18-3.Suppose the firm pays a wage equal to $320 per unit of labor and sells its output at $15 per unit.How many units of labor should the firm hire to maximize profit?

• A) 2 units
• B) 3 units
• C) 4 units
• D) 5 units

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Definitions:

Bureaucrats

Officials within an administrative system, especially those perceived as being concerned with procedural correctness at the expense of people's needs.

Public-sector Managers

Individuals responsible for directing, controlling, and overseeing the operations and budgets within government departments or public sector organizations.

Economically Efficient

A situation in which resources are allocated in a way that maximizes the net benefit to society, with no way to improve someone's condition without worsening another's.

Public Choice Theory

An economic theory that studies how public decisions and policies are made, considering individuals in the public sector make choices largely based on their own interests, similar to those in the private sector.