Omega Custom Cabinets Produces and Sells Custom Bathroom Vanities

question 1

Multiple Choice

Omega Custom Cabinets produces and sells custom bathroom vanities. Assume that labor is the only input that varies for the firm. The firm has determined that if it hires 10 workers, it can produce and sell 20 vanities per week. If it hires 11 workers, it can produce and sell 22 vanities per week. It sells each vanity for $800, and it pays each of its workers $1,000 per week. Which of the following is correct?

• A)For the 11th worker, the marginal profit is $600.
• B)For the 11th worker, the marginal revenue product is $2,000.
• C)The firm is maximizing its profit.
• D)If the firm is employing 11 workers, then its profit would increase if it cut back to 10 workers.

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Definitions:

Direct Leadership

A leadership approach where the leader interacts with followers directly, providing clear instructions, guidance, and feedback.

Human Capital

The skills, knowledge, experiences, and abilities possessed by individuals, regarded as assets to an organization or country.

Social Capital

The networks, relationships, and connections among people that can be economically valuable and facilitate cooperation and coordination.

Process Reliability

The likelihood that a process will perform without failure under specified conditions for a given period of time.