The Following Table Shows the Total Output Per Hour Produced

question 47

Multiple Choice

The following table shows the total output per hour produced in a factory at various levels of employment of labor. The firm sells each unit of output at $2 and each worker is paid a wage of $12.
Table 5-1
$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Nurnber of } \\\text { workers }\end{array} & \text { Total output } \\\hline 1 & 8 \\\hline 2 & 18 \\\hline 3 & 30 \\\hline 4 & 41 \\\hline 5 & 50 \\\hline 6 & 55 \\\hline 7 & 59 \\\hline 8 & 61 \\\hline 9 & 62 \\\hline\end{array}$
-Refer to Table 5-1. How many workers should the firm employ in order to maximize profit?

• A) 7
• B) 6
• C) 5
• D) 4
• E) 3

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Definitions:

Operating Segments

Components of a business that engage in distinct economic activities, generating revenues and incurring expenses, whose results are reviewed regularly by the entity’s decision-makers.

Consolidated External Revenues

The total revenue generated by a parent company and its subsidiaries, excluding transactions among them, reported in the consolidated financial statements.

Asset Test

A measure used to evaluate whether an entity has enough liquid assets to cover its short-term liabilities, indicating financial stability.

Reportable Segments

Parts of a business that can be separately identified by the products or services they offer or by their geographical areas, and about which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.