29) Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit.Assume that labor is the only input. If the last worker hired increases output by three units perhour, then to maximize profits the firm shouldA) lay off some of its workers.B) hire additional workers.C) not change the number of workers it currently hires.D) There is not enough information to answer the question.Answer: A29)Diff: 2Page Ref: 546-547/546-547Topic: Marginal Product of LaborLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Analytic Skills30) LetMP=marginal product,P=output price, andW=wage, then the equation that represents thecondition where a competitive firm would hire another worker isB)P×MP=W.C)P×W>MP.D)P×MP<W.30)Diff: 1Page Ref: 546-547/546-547Topic: Marginal Product of LaborLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Reflective Thinking31) LetMP=marginal product,P=output price, andW=wage, then the equation that represents asituation where a competitive firm should lay off some workers to maximize profits isB)MP×W=P.C)P×MP<W.D)P×MP=W.31)Diff: 1Page Ref: 546-547/546-547Topic: Marginal Product of LaborLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Reflective Thinking32) If a worker can produce 20 units of output which can be sold for $4 per unit, what is the maximumwage that firm should pay to hire this worker?32)Diff: 2Page Ref: 546-547/546-547Topic: Marginal Product of LaborLearning Outcome: Micro 17: Explain the effects of the factors of production, factor demand, and factorsupply and labor in factor marketsAACSB: Analytic Skills10

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