A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $1 a bushel, the wage rate is $12, the farmer employs six workers and the marginal product of the sixth worker is 10. What would you advise this farmer to do? O Increase employment because the wage paid is less than the marginal revenue product. O Reduce employment because the wage paid is greater than the marginal revenue product. O Do nothing because the wage rate and the marginal product of the last worker hired are equal. O Reduce the product price so that the wage and marginal revenue product will be equal.
A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $1 a bushel, the wage rate is $12, the farmer employs six workers and the marginal product of the sixth worker is 10. What would you advise this farmer to do? O Increase employment because the wage paid is less than the marginal revenue product. O Reduce employment because the wage paid is greater than the marginal revenue product. O Do nothing because the wage rate and the marginal product of the last worker hired are equal. O Reduce the product price so that the wage and marginal revenue product will be equal.
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: The Markets For The Factor Of Production
Section: Chapter Questions
Problem 7PA
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Transcribed Image Text:QUESTION 9
A soybean farmer sells soybeans in a perfectly competitive market and hires labor in a perfectly competitive market. The market price of soybeans is $1 a bushel, the
wage rate is $12, the farmer employs six workers and the marginal product of the sixth worker is 10. What would you advise this farmer to do?
O Increase employment because the wage paid is less than the marginal revenue product.
O Reduce employment because the wage paid is greater than the marginal revenue product.
O Do nothing because the wage rate and the marginal product of the last worker hired are equal.
O Reduce the product price so that the wage and marginal revenue product will be equal.
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