Sam Owns a Candy Factory and Hires Workers in a Competitive

question 142

Multiple Choice

Sam owns a candy factory and hires workers in a competitive labor market to pack cases of candy.The company's weekly output of cases of candy varies with the number of workers hired,as shown in the table: $$\begin{array} { c c } \text { Number of workers } & \text { Cases/week } \\0 & 0 \\1 & 160 \\2 & 310 \\3 & 450 \\4 & 580 \\5 & 700 \\6 & 810\end{array}$$
If each case sells for $3 more than the cost of the materials used in producing it,then the most Sam would pay the 5^th worker is _______.

• A)$330
• B)$360
• C)$390
• D)$120

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Definitions:

Labor

The use of human labor, be it physical or intellectual, in generating goods and services.

MRTS

Marginal Rate of Technical Substitution. It's the rate at which one input can be reduced for every increase in another input, keeping output constant.

Labor

The application of human physical and mental efforts in the creation and offering of goods and services.

Capital

Assets that are used in the production of goods and services, often classified into physical capital (like machinery) and financial capital.