Solved

The Figure Below Depicts a Production Function for a Firm

Question 59

Essay

The figure below depicts a production function for a firm that produces cookies.
Figure 12-4 The figure below depicts a production function for a firm that produces cookies. Figure 12-4 -The Hardboard Construction Company hired Bob at $10 an hour, but its output of doll houses only increased by three units a day. Two weeks later, the company purchased an $8 hammer for Bob and output increased by twelve units. Since the hammer increased the marginal product more than Bob did, and at less cost, Hardboard fired Bob. Is this consistent with the theory of marginal productivity? Why or why not?
-The Hardboard Construction Company hired Bob at $10 an hour, but its output of doll houses only increased by three units a day. Two weeks later, the company purchased an $8 hammer for Bob and output increased by twelve units. Since the hammer increased the marginal product more than Bob did, and at less cost, Hardboard fired Bob. Is this consistent with the theory of marginal productivity? Why or why not?

Correct Answer:

verifed

Verified

This example illustrates a minor flaw wi...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q54: Marginal revenue product is the<br>A) additional revenue

Q55: Use the figure to answer the following

Q56: The demand for most products is likely

Q57: An improvement in technology that allows workers

Q58: If the marginal physical product (MPP) of

Q60: If skilled labor is three times the

Q61: An unexpected decrease in the demand for

Q62: Assume that skilled labor costs twice as

Q63: When the price of steel rises, Ford

Q64: Suppose a new oxygen-enrichment process will cut