Answered: Units of Resource 0 1 2 3 4 5 Total…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Units of Resource	1	2	3	4	5
Total Product	10	18	24	28	30
Total Revenue ($)	30	54	72	84	90

Refer to the table. The marginal revenue product of the third unit of resource is

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$4.

$8.

$18.

$72.

A profit-maximizing firm will use additional units of resources for production until

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total, average, and marginal cost are equal.

total, average, and marginal revenue are equal.

the marginal revenue product equals the marginal resource cost.

the marginal revenue product is greater than the marginal resource cost.

The marginal revenue product of an input in a competitive market decreases as a firm increases the quantity of the input employed because of the

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law of diminishing returns.

law of diminishing marginal utility.

homogeneity of the product.

free mobility of resources.

Units of Resource	1	2	3	4	5
Total Product	6	11	15	18	20
Total Revenue ($)	36	55	60	54	40

Refer to the table. The price of the product being produced by this resource

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is constant at all levels of production.

cannot be discerned from the given data.

decreases as production increases.

increases as production increases.

A profit-maximizing firm should hire an input as long as the

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firm can increase its total revenue.

price of the input doesn't exceed the price of the other inputs used in the firm's production.

marginal revenue product of the input is at least as much as the cost of hiring the input.

marginal revenue product of the input is greater than the marginal revenue product of other inputs the firm is using.

Under pure competition, the market price of an output is $3. The output schedule of a firm using input X is listed in the table. If the price of input X is $12, how many units of input X will the firm employ to maximize profits?

Units of X	Marginal Product
1	10.0
2	9.9
3	8.8
4	7.7
5	6.6
6	5.5
7	4.4
8	3.3
9	2.2

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