A Wheat Farmer Sells Wheat in a Perfectly Competitive Market

question 182

Multiple Choice

A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of wheat is $2 a bushel, the wage rate is $10, the farmer employs five workers and the marginal product of the fifth worker is 3 bushels. What would you advise this farmer to do?

• A) Do nothing because the wage rate and the marginal product of the last worker hired are equal.
• B) Reduce employment because the wage paid is more than the marginal revenue product.
• C) Increase employment because the wage paid is less than the marginal revenue product.
• D) Reduce the product price so that the wage and marginal revenue product will be equal.

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Definitions:

Obese

A medical condition characterized by excessive body fat accumulation, which presents risks to health.

BMI

Body Mass Index, a measure calculated from a person's weight and height as an indicator of body fat and general health.

97th Percentile

A statistical measurement indicating that an individual's score surpasses 97% of the population in a given dataset.

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A respiratory condition characterized by episodes of wheezing, coughing, and shortness of breath in children, often triggered by allergies or infections.