The Table Below Shows a Competitive Firm's Short-Run Production Function

question 69

Multiple Choice

The table below shows a competitive firm's short-run production function.Labor is the firm's only variable input,and market price for the firm's product is $2 per unit. If the wage rate is $200,the firm should

• A)shut down because average revenue product is $200,which is less than marginal revenue product.
• B)shut down because average revenue product is $228,which is greater than the wage rate.
• C)produce because average revenue product is $200,which is less than marginal revenue product.
• D)produce because average revenue product is $245,which is greater than the wage rate.

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Definitions:

Effort Justification

A phenomenon where individuals rationalize the effort they have put into achieving a goal, valuing it more highly as a result.

Resume

A document summarizing an individual's background, including education, work experience, and skills, typically used for job applications.

Cognitive Dissonance Theory

The theory that inconsistencies produce psychological discomfort, leading people to rationalize their behavior or change their attitudes.

Social Loafing

The finding that people reduce effort when working in a group, compared to when working alone.