HW6_anskeys - HW6 (Chapter 11 + Chapter 12) Part I....

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HW6 (Chapter 11 + Chapter 12) Part I. Multiple Choice Questions – Choose the best answer. (40%) 1. C. 2. C. 3. B. 4. A. 5. B. 6. B. 7. A. 8. B. Part II. Short Answer Questions (60%) 1. Textbook page 269, Q2, part d), e), f) and g). Answer: d) The firm enjoys the benefits of increased specialization and division of labor over the range of output for which the marginal cost decreases. This range of output is the same range over which the marginal product of labor rises. For Sue’s Surfboards, the benefits of increased specialization and division of labor occur until 2.5 workers are employed. e) The marginal product of labor decreases after 2.5 workers are employed. f) The marginal product of labor decreases and the average product of labor increases between 2.5 and 3.5 workers. g) As long as the marginal product of labor exceeds the average product of labor, the average product of labor rises. For a range of output the marginal product of labor, while decreasing, remains greater than the average product of labor, so the average product of labor rises. Each additional worker, while producing less than the previous worker hired
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This note was uploaded on 02/13/2012 for the course ECO 201 taught by Professor Dunlevy during the Fall '08 term at Miami University.

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HW6_anskeys - HW6 (Chapter 11 + Chapter 12) Part I....

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