The marginal physical product of labor for the most recent worker hired by a company is 100. If this company were to hire an additional worker we would expect the marginal physical product of labor to
A) remain at 100.
B) be below 100.
C) be above 100 by a small amount.
D) be infinity.
Answer: B
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A single-price monopoly faces a linear demand curve. If the marginal revenue for the second unit is $20, then the marginal revenue for the
A) first unit is less than $20. B) third unit is less than $20. C) third unit is more than $20. D) third unit is also $20. E) more information is needed to determine if the marginal revenue for the third unit is more than, less than, or equal to $20.
Given the information in Scenario 4.3, suppose that the price of erasers increases slightly from $10. How will this affect the total revenue collected by the firm?
A) Total revenue will increase. B) Total revenue will not change. C) Total revenue will decrease. D) There will be an indeterminate change in total revenue.