Question

1. A firm employs workers until the final worker's marginal Revenue Product is equal to his _________________________

a. wage

b. output

c.marginal revenue cost

d. marginal profit

2. Suppose that a D'Lish Hamburger stand produces burgers and hires employees.  Lets suppose that the owner, Dave, makes $0.25/burger in profit not including what he pays his employees. Complete the following chart with respect to employees hired in the following order assuming that he hires all 3 and only these 3.

# name    burgers produced MRP Wage

1 curley    60

2    Moe 48

3 Larry    44

Answer 1

Answer 1: Option A is correct. A firm employs workers until the final workers Marginal revenue product is equal to wages. Wages is exactly equal to marginal revenue Product of the labour.When Marginal revenue product is less than wages there is hiring more labour where as when wages is more than marginal revenue product the firm stop hiring workers.

Answer 2: Table showing information:

Serial number-Name	Burger produced	MRP L =MP* Wages	Wages
1-Curley	60	60*$0.0625= $3.75	$0.0625
2-Moe	48	12* $0.0625= $0.75	$0.0625
3-Larry	44	4* $0.625= $0.25	$0.0625