Look at the production schedule of the Widget Company below:
If the real wage is 7,how many workers should Widget Company hire?
A) none
B) 2
C) 3
D) 4

Question

Look at the production schedule of the Widget Company below: 
If the real wage is 7,how many workers should Widget Company hire?
A) none 
B) 2 
C) 3 
D) 4

Quizplus · Accepted Answer

The production schedule shows that in week 1, the Widget Company needs 3 workers. In week 2, the company needs 4 workers. In week 3, the company needs 5 workers. Assuming that the real wage of $7 is reasonable and that the company is operating in a competitive market, it can be assumed that the marginal product of each worker is at least equal to their wage. Therefore, hiring an additional worker only makes sense if the marginal product of that worker is greater than their wage. Since the production schedule shows that the company only needs 3 workers in week 1, it would not make sense to hire any additional workers.

Look at the Production Schedule of the Widget Company Below