1) Assume the total product of two workers is 110 and the total product of three
ID: 1248056 • Letter: 1
Question
1) Assume the total product of two workers is 110 and the total product of three workers is 120. The third worker's average product is ________ while her marginal product is ________.a.
120; 110
c.
50; 10
b.
40; 20
d.
40; 10
2) You own and are the only employee of a company that sets odds for sporting events. Last year your total revenue was $60,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a $20,000 a year return.
A yearly normal profit for your company is
a.
$20,000.
c.
$60,000.
b.
$100,000.
d.
$40,000.
3) Burning Bob's Salsa House serves 30 customers in an hour when it hires one worker. It serves 60 customers in an hour when it hires two workers. The marginal product of the second worker is ________ customers served per hour.
a.
67.5
c.
50
b.
20
d.
30
Explanation / Answer
1. d 120/3=40 120-110=10 2. a Your normal profit should be 20,000 because that is equal to your opportunity cost of capital. 3. d You go from 30 to 60 with the hiring of the second worker so his marginal product is 30.
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