55) A wheat farmer sells wheat in a perfectly competitive market and hires labor in a perfectlycompetitive market. The market price of wheat is $2 a bushel, the wage rate is $10, and thefarmer employs five workers. If the farmer is maximizing his profits, then the marginalproduct of the fifth worker is ________.A) 0.2 bushelsB) 5 bushelsC) 20 bushelsD) indeterminate from the given information.Answer: BDiff: 2Topic: Input Markets: Basic ConceptsSkill: AnalyticAACSB: Analytic Skills56) The law of ________ explains why a marginal revenue product schedule eventually declines.A) diminishing marginal opportunity costsB) increasing marginal returnsC) increasing marginal opportunity costsD) diminishing marginal returnsAnswer: DDiff: 1Topic: Input Markets: Basic ConceptsSkill: Fact57) An increase in technology will cause a marginal revenue product of labor curve toA) be unaffected because the productivity of labor has not changed.B) shift to the left.C) shift to the rightD) become more inelastic.Answer: CDiff: 3Topic: Input Markets: Basic ConceptsSkill: ConceptualAACSB: Reflective Thinking58) A firm competing in a perfectly competitive labor market desires to maximize ________.A) marginal profit, not total profitB) total profit, not marginal profitC) marginal profit, not average profitD) average profit, not marginal profitAnswer: BDiff: 3Topic: Input Markets: Basic ConceptsSkill: ConceptualAACSB: Reflective Thinking307
