Question 1.34: Marginal product of labor Country Z has perfectly competitive markets in which labor and all goods clear. A firm produces bread using raw material (flour), workers (bakers), and capital (ovens). A worker produces 29 loaves of bread each hour. Each loaf of bread sells for 3.47. The firm uses flour costing 1.53 for each loaf of bread. No bread remains unsold each day, and consumers can buy all the bread they want. The price level is 1.39. The nominal wage rate is 56.62 an hour. Firms earn an accounting profit of 2.20 on each loaf of bread. What is the marginal product of labor (in real terms) for bakers? A. 40.73 an hour ●
Question 1.34: Marginal product of labor Country Z has perfectly competitive markets in which labor and all goods clear. A firm produces bread using raw material (flour), workers (bakers), and capital (ovens). A worker produces 29 loaves of bread each hour. Each loaf of bread sells for 3.47. The firm uses flour costing 1.53 for each loaf of bread. No bread remains unsold each day, and consumers can buy all the bread they want. The price level is 1.39. The nominal wage rate is 56.62 an hour. Firms earn an accounting profit of 2.20 on each loaf of bread. What is the marginal product of labor (in real terms) for bakers? A. 40.73 an hour ●
Chapter11: The Firm: Production And Costs
Section: Chapter Questions
Problem 15P
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![Question 1.34: Marginal product of labor
Country Z has perfectly competitive markets in which labor and all goods clear.
A firm produces bread using raw material (flour), workers (bakers), and capital (ovens).
A worker produces 29 loaves of bread each hour.
Each loaf of bread sells for 3.47.
●
●
The firm uses flour costing 1.53 for each loaf of bread.
No bread remains unsold each day, and consumers can buy all the bread they want.
The price level is 1.39.
The nominal wage rate is 56.62 an hour.
● Firms earn an accounting profit of 2.20 on each loaf of bread.
What is the marginal product of labor (in real terms) for bakers?
A. 40.73 an hour
B. 45.90 an hour
C. 63.80 an hour
D. 72.40 an hour
E. 100.63 an hour
Question 1.35: Real interest rate
Which of the following causes the current real interest rate to decrease?
A. A permanent decrease in government spending
B. A temporary decrease in government spending
C. Central bank purchases of bonds in the open market
D. Central bank sales of bonds in the open market
E. None of A, B, C, or D is true.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc0eba744-2ca5-4b9b-b356-631e195ec79e%2Fdb3b3fab-c195-43c2-b46b-cc54184a9dcf%2Flxy7dq_processed.png&w=3840&q=75)
Transcribed Image Text:Question 1.34: Marginal product of labor
Country Z has perfectly competitive markets in which labor and all goods clear.
A firm produces bread using raw material (flour), workers (bakers), and capital (ovens).
A worker produces 29 loaves of bread each hour.
Each loaf of bread sells for 3.47.
●
●
The firm uses flour costing 1.53 for each loaf of bread.
No bread remains unsold each day, and consumers can buy all the bread they want.
The price level is 1.39.
The nominal wage rate is 56.62 an hour.
● Firms earn an accounting profit of 2.20 on each loaf of bread.
What is the marginal product of labor (in real terms) for bakers?
A. 40.73 an hour
B. 45.90 an hour
C. 63.80 an hour
D. 72.40 an hour
E. 100.63 an hour
Question 1.35: Real interest rate
Which of the following causes the current real interest rate to decrease?
A. A permanent decrease in government spending
B. A temporary decrease in government spending
C. Central bank purchases of bonds in the open market
D. Central bank sales of bonds in the open market
E. None of A, B, C, or D is true.
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