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Ex5Fri

# Ex5Fri - Do you have a job during the school year 69 ho or...

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Do you have a job during the school year? No. Yes, less than 10 hou.. Yes, between 10 and .. Yes, 20 or more hour... 69% 10% 14% 6% 1. No. 2. Yes, less than 10 hours per week. 3. Yes, between 10 and 20 hours per week. 4. Yes, 20 or more hours per week.

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If the average value product of labor is greater than the wage, a firm can increase its profits by hiring more labor . True False 71% 29% 1. True 2. False
With 4 workers, Avg Val Product is \$90. That exceeds the wage. Will profits increase from hiring a fourth worker? No. See table. workers v.output AVP Profits 1 \$200 \$200 \$175 2 \$300 \$150 \$250 3 \$350 \$116.66 \$275 4 \$360 \$90 \$260 Example: Wage is \$25

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A profit maximizing firm will choose the amount of labor that maximizes the marginal value product of labor. 17% 83% 1. True 2. False
To maximize Marginal Value Product hire 1 To maximize profits, hire 3. What does Marginal value product rule say? Hire additional labor so long as marginal value product exceeds the wage. workers v.output MVP Profits 1 \$200 \$200 \$175 2

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