Table 17-3 Hotspur Incorporated, a Manufacturer of Microwave Ovens, Is a Price

question 145

Multiple Choice

Table 17-3

Hotspur Incorporated, a manufacturer of microwave ovens, is a price taker in its input and output markets. The firm hires labor at a constant wage rate of $800 per week and sells microwave ovens at a constant price of $80. Table 17-3 shows the relationship between the quantity of labor it hires and the quantity of microwave ovens it produces. Assume that labor is the only variable input.
-Refer to Table 17-3.What is the amount of profit added as a result of hiring the fourth worker?

• A)$7,200
• B)$1,200
• C)$800
• D)$400

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Definitions:

Philosophical Argument

A reasoned and logical discourse aimed at uncovering the truth through the examination of ideas, concepts, and premises.

Free Will

The ability of agents to make choices unconstrained by certain factors.

Environment

The sum of all external conditions and influences affecting the life, development, and survival of an organism or group of organisms.

Needs Hierarchy

A motivational theory proposed by Abraham Maslow that suggests human needs are arranged in a hierarchy, from most to least important.