The Bubby Gum factory produces bubble gum. Joanne is one of the employees, and she produces 10 packs of bubble gum per hour. Joanne's money wage rate is $12 per hour. If a packet of bubble gum sells for $1.00, then Joanne ________ because ________
A) should recommend that the Bubby Gum company should decrease the price of the bubble gum ; it would sell more and bring a larger profit
B) is creating a $2.00 per hour profit for the firm; her real wage rate is more than her output per hour
C) is creating a $2.00 per hour loss for the firm; her real wage rate is more than her output per hour
D) should ask for a raise in pay; then her real wage would be less than her output per hour
E) is the last person the Bubby Gump company will employ; an additional hire would produce equal the amount of additional labor to real wage per hour
C
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Refer to Figure 2-3. Sergio Vignetto raises cattle and llamas on his land. A portion of his land is more suitable for raising cattle, and the other portion is better suited for raising llamas
Which of the graphs in Figure 2-3 represent his production possibilities frontier that displays increasing opportunity costs? A) Graph A B) Graph B C) Graph C D) either Graph A or Graph C E) either Graph B or Graph C
The marginal product of capital (MPK) can be calculated from the following ________
A) the capital share of income and the average output per unit of capital B) the capital share of income and average capital per worker C) output and capital D) the capital share of income and output E) none of the above