Use the Following to Answer Questions -(Table: Workers and Corn Output)Use Table: Workers and Corn Output

question 278

Multiple Choice

Use the following to answer questions : $$\begin{array}{l}\text { Table: Workers and Corn Output }\\\begin{array} { l c } \hline \begin{array} { l } \text { Numbers } \\\text { of Workers }\end{array} & \begin{array} { c } \text { Output } \\\text { of Corn } \\\text { (units of corn) }\end{array} \\\hline 0 & 0 \\1 & 30 \\2 & 58 \\3 & 79 \\4 & 94 \\5 & 104 \\6 & 108 \\7 & 110 \\\hline\end{array}\end{array}$$
-(Table: Workers and Corn Output) Use Table: Workers and Corn Output.Laura is a price-taking farmer who produces corn.Assume that the wage rate for workers is $130 and the price per kilogram of corn is $10.Suppose that Laura acquires more land and as a result the output that can be produced by any given number of workers doubles.Laura should hire _____ workers to maximize profits.

• A) 4
• B) 5
• C) 6
• D) 7

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Definitions:

Price-taker Industry

An industry in which individual firms have no control over the price of their product; they "take" the market price as given.

Long-run Equilibrium

A state in which all factors of production and costs are variable, and firms no longer have any incentives to enter or exit the market, resulting in an optimal allocation of resources.

Marginal Cost

The increase in cost resulting from the production of one additional unit of a good or service.