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Questions Are Based on the Data in the Following

Question 40

Multiple Choice

Questions are based on the data in the following table. Assume that the labor market is perfectly competitive.




 Labor  Output 00115229342454565675 Price (D1) $10.0010.0010.0010.0010.0010.0010.00 Price (D2) $10.009.509.008.507.506.505.50\begin{array}{cc}\begin{array}{cc}\text { Labor } & \text { Output } \\\hline0& 0 \\1 & 15 \\2 & 29 \\3 & 42 \\4 & 54 \\5 & 65 \\6 & 75\end{array}\begin{array}{c}\text { Price }\left(D_{1}\right) \\\hline\$ 10.00 \\10.00 \\10.00 \\10.00 \\10.00 \\10.00 \\10.00 \\\end{array}\begin{array}{c}\text { Price }\left(\mathrm{D}_{2}\right) \\\hline \$ 10.00 \\9.50 \\9.00 \\8.50 \\7.50 \\6.50 \\5.50\end{array}\end{array}
-Compared to a firm facing D1,a firm facing demand schedule D2 but paying the same wage will hire:


A) the same number of workers,since total product is the same in both instances
B) fewer workers,since product price declines as output increases
C) more workers,since product price declines as output increases
D) more information is required

Correct Answer:

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