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

question 30

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 market price for the firm's product increases to $5,how many units of labor will the firm employ at a wage rate of $200?

• A)0,the firm shuts down
• B)4
• C)5
• D)6

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Definitions:

Drive-Reduction Theory

A theory in psychology proposing that the motivation of behavior arises from biological needs that drive an organism to seek homeostasis.

Bodily Needs

Fundamental physiological requirements critical for the survival and proper functioning of the human body, such as food, water, and sleep.

Tension

A state of mental or emotional strain or stress resulting from adverse or demanding circumstances.

Acquired Drive

A learned or conditioned drive that results from experiences or social influences, rather than innate biological needs.