The Bountiful Bakery Is Considering Hiring Another Pastry Chef

question 112

Multiple Choice

The Bountiful Bakery is considering hiring another pastry chef.The bakery knows that the average product of its chefs currently is 15 dozen croissants per day.It also believes that the next chef hired will produce an extra 12 dozen croissants per day.A dozen croissants sell for $30.The bakery should hire another worker:

• A) only if the new chef's marginal product is 12 dozen or more.
• B) only if the new chef's daily wage is $450 or less.
• C) only if the new chef's daily wage is $360 or less.
• D) because the marginal product is below the average product.

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Definitions:

Managed Floating

An exchange rate system where a country's currency value is allowed to fluctuate in response to foreign-exchange market mechanisms, but the central bank can intervene to prevent extreme fluctuations.

Bretton Woods System

A monetary management system established post-World War II, which set up rules for commercial and financial relations among major industrial states.

Pegged Exchange Rates

A fixed exchange rate system where a country's currency value is fixed or pegged to another currency, a basket of currencies, or another measure of value.