Econ 1014 Exam 4 Study Guide

Suppose the united states decides to adopt a new

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5) Suppose the United States decides to adopt a new policy that prohibits employers from firing an employee without first obtaining government permission. If this policy went into operation: a) Labor would more often be considered a fixed input b) Employers would have to consider more carefully the decision to hire a new employee since they will find it harder to get rid of the employee c) The cut-off time between a short-run and a long-run for many businesses would be reduced d) All of the above e) None of the above Unit 5 Section 5: The Short-Run Production Function 1) Suppose a certain producer is able to produce 1750 units of output per month when 5 worker are hired. The producer is able to produce 1980 units of output per month when 6 workers are hired. The marginal product of labor when the 6 th worker is hired is: 2) Suppose a certain producer is able to produce 7150 units of output per month when 5 workers are hired. When the producer hires the 6 th worker the marginal product of labor is 230. How will the average product of labor when 6 workers are hired differ from the average product of labor when only 5 workers are hired? a) It will be the same b) It will be less c) It will be more d) We cannot tell from given information e) It will be more, but it will be falling 3) Suppose a certain producer is able to produce 7150 units of output per month when 5 workers are hired. When the producer hires the 6 th worker the marginal product of labor is 230. What is most likely to be happening in the production process when the 6 th worker is hired?
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4) What will be the shape of the marginal product of labor curve for a producer which benefits from teamwork and specialization at all hiring levels, never experiencing any crowding of fixed inputs because it does not depend on fixed inputs?
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