If the Marginal Cost of Hiring Another Worker to Produce

question 15

Multiple Choice

If the marginal cost of hiring another worker to produce sandwiches is $4 per sandwich,and sandwiches sell for $5 each,then:

• A) another worker should be hired.
• B) another worker should not be hired.
• C) two more workers should be hired.
• D) Cannot answer this without more information.

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Definitions:

Supply Curve

A visual diagram illustrating the correlation between a product's price and the amount of it suppliers are prepared to produce.

Equilibrium Price

The market price where the quantity of goods supplied is equal to the quantity of goods demanded.

Cost

The amount of money, time, and resources associated with producing or acquiring goods and services.

Producer Surplus

The difference between what producers are willing to sell a good for and the price they actually receive, reflecting their benefit.