Refer to Table 10.1. If the price of output is $2 per unit and we observe the firm hiring six workers, if the firm is maximizing profit, the wage rate must be between ________ and ________.

A perfectly competitive firm maximizes its profit by

A) setting its price so that it exceeds the marginal revenue. B) choosing to produce the quantity that sets MC equal to MR. C) cutting wages. D) manipulating demand.

Suppose that each worker must use only one shovel to dig a trench, and shovels are useless by themselves. In the long run, an increase in the price of shovels will result in

A) fewer shovels being purchased to produce the same number of trenches. B) more workers being hired to produce the same number of trenches. C) the firm wishing to produce more trenches. D) no change in the firm's input mix.