SOLVED

8.3  The Marginal Product of Labor and the Average Product of Labor 1) The marginal product of labor is defined as A) the additional sales revenue that results when one more worker is hired. B) the additional output that results when one more worker is hired, holding all other resources constant. C) the additional number of workers required to produce one more unit of output. D) the cost of hiring one more worker. 2) If four workers can produce 18 chairs a day and five can produce 20 chairs a day, the marginal product of the fifth worker is A) 2 chairs. B) 3 chairs. C) 4 chairs. D) 38 chairs. 3) Red Stone Creamery currently hires 5 workers. When it added a 6th worker, its output actually fell. Which of the following statements is true? A) The marginal product of the sixth worker must be negative. B) The average product of the sixth worker is negative. C) The sixth worker is not as skilled as the fifth worker. D) The total product becomes negative. 4) The law of diminishing marginal returns states A) that at some point, adding more of a fixed input to a given amount of variable inputs will cause the marginal product of the variable input to decline. B) that at some point, adding more of a variable input to a given amount of a fixed input will cause the marginal product of the variable input to decline. C) that in the presence of a fixed factor, at some point average product of labor starts to fall as more and more variable inputs are added. D) average total costs of production initially fall and after some point starts to rise at a decreasing rate as output increases. 5) The law of diminishing marginal returns A) explains why the average total cost and marginal cost curves are U-shaped in the short run. B) explains why the average total cost, average fixed cost and the marginal cost curves are U-shaped in the short run. C) causes average total costs to rise at a decreasing rate as output increases. D) causes the difference between average total cost and average variable cost to get smaller as output increases. 6) As a firm hires more labor in the short run, the A) level of total product stays constant. B) output per worker rises. C) extra output of another worker may rise at first, but eventually must fall. D) costs of production are increasing at a fixed rate per unit of output. 7) If diminishing marginal returns have already set in for Golden Lark Woodworks, and the marginal product of the 6th carpenter is 8 chairs, then the marginal product of the 7th carpenter is A) negative. B) less than 8 chairs. C) more than 8 chairs. D) zero. 8) Refer to Figure 8-1. The marginal product of the 3rd worker is A) 57. B) 19. C) 15. D) 11. 9) Refer to Figure 8-1. The marginal product of the 7th worker is A) 66. B) 9.43. C) 2. D) -2. 10) Refer to Figure 8-1. The average product of the 4th worker A) is 68. B) is 17. C) is 11. D) cannot be determined.