Table 13-12
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs.
-Refer to Table 13-12. Eileen has received an order for 3,000 boxes of earrings for next week. If she expects that the trend in the marginal product of labor will continue in the same direction, it is most likely that her best decision will be to
A)not commit to meeting the order until she can move to a larger room and hire more workers to produce the earrings.
B)close her business until she is able to hire more productive workers.
C)hire about 12 new workers and hope she can satisfy the order.
D)commit to meeting the order and then take three weeks to complete the job.

Question

Table 13-12
Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs. 
-Refer to Table 13-12. Eileen has received an order for 3,000 boxes of earrings for next week. If she expects that the trend in the marginal product of labor will continue in the same direction, it is most likely that her best decision will be to
A)not commit to meeting the order until she can move to a larger room and hire more workers to produce the earrings. 
B)close her business until she is able to hire more productive workers. 
C)hire about 12 new workers and hope she can satisfy the order. 
D)commit to meeting the order and then take three weeks to complete the job.

Quizplus · Accepted Answer

If the trend in the marginal product of labor is decreasing, Eileen should not commit to meeting the order until she can expand her capacity by moving to a larger room and hiring more workers to ensure she can meet the demand efficiently.

Table 13-12 Eileen's Elegant Earrings Produces Pairs of Earrings for Its Mail