Consider Two Situations: in Situation a the Production of Widgets

question 31

Multiple Choice

Consider two situations: In situation A the production of widgets is monopolized by a single firm.In situation B the production of widgets is perfectly competitive.In both situations the supply of labor to widget makers is infinitely elastic at a wage of w.Which of the following statements is true?

• A)The marginal value product of labor will be the same in the two cases.
• B)The marginal value product of labor is higher in case B than in case A.
• C)The marginal value product of labor is higher in case A than in case B.
• D)From the information given it is not possible to make a definite statement about the marginal value product of labor.

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Definitions:

Control Group

In experimental research, a group of subjects that does not receive the treatment being tested, used for comparison against the group that does.

Random Sampling

A technique for selecting a sample from a population in a way that every member has an equal chance of being chosen.

Educated Guess

An assumption or prediction made based on known facts and logical reasoning, despite the absence of complete information.

Empirical Evidence

Information acquired by observation or experimentation that is used to confirm or disprove a hypothesis or theory.