If the Marginal Product of the Second Worker Hired by a Firm

question 156

Multiple Choice

If the marginal product of the second worker hired by a firm is 14 units and the price of the tenth unit of output is $7,then the marginal revenue product _____

• A)of the second worker is $98 regardless of the structure of the product market.
• B)of the second worker is $98 if the firm is a price maker in the product market.
• C)of the second worker is $98 if the product market is perfectly competitive.
• D)of the tenth worker is $98 if the product market is perfectly competitive.
• E)of the tenth worker is $98 if the firm is a price taker in the product market.

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Definitions:

Effective Annual Rates

The real return on an investment, taking into account the effect of compounding interest over multiple periods within a year.

Equal Installments

Periodic payments of the same amount over the term of a loan or investment.

Borrowed

Borrowed refers to funds that have been taken on loan from external sources, which are expected to be paid back with interest over time.

Daily Compounding

The process where the interest on an investment is calculated daily and added to the principal, so that each subsequent calculation of interest includes interest previously earned.