Ask Question
BusinessBusiness
21 March, 07:18

Mr. Cobb, a corn farmer, pays his workers $8 an hour. At his current level of labor use, the marginal product of an additional hour of labor is three bushels of corn. The market price of corn is $2.75. In order to maximize his profits, Mr. Cobb should:

a. hire more labor because the marginal revenue product is below the wage.

b. not hire more labor because the marginal revenue product exceeds the wage.

c. raise the price of the corn that he sells.

d. not hire more labor because the marginal revenue product is below the wage.

e. hire more labor because the marginal revenue product exceeds the wage.

+1
Answers (1)
  1. 21 March, 10:54
    0
    The correct answer is Option (E).

    Explanation:

    According to the scenario, the given data are as follows:

    Worker Wage = $8

    Rate of corn bushel = $2.75

    Work done = 3 bushels per labor hour

    So, from this we can calculate the marginal revenue of product,

    Marginal revenue of product = Rate of corn bushel * Work done

    = $2.75 * 3 = $8.25

    As, Marginal Revenue > Wage

    More marginal revenue means more profit.

    Hence, Mr. Cobb should hire more labor because the marginal revenue product exceeds the wage.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Mr. Cobb, a corn farmer, pays his workers $8 an hour. At his current level of labor use, the marginal product of an additional hour of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Advances in genetic engineering are expected to produce some food products that will become available all year round even in continental climates.
Answers (1)
How is the negative externality exhibited by Jake affecting the society? Jake's overspending can result in personal bankruptcy, which will adversely affect the lives of his friends, family, and others, who were otherwise not involved in his
Answers (1)
Jackson and Campbell have capital balances of $100,000 and $300,000, respectively. Jackson devotes full time and Campbell devotes one-half time to the business.
Answers (1)
Your coin collection contains fifty 1952 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2067, assuming they appreciate at an annual rate of 4.
Answers (1)
As a proponent of the free market, Adam Smith viewed the main factors of production as labor, land, capital and entrepreneurship. True or False?
Answers (1)
New Questions in Business
Tomika Corporation has current and accumulated earnings and profits of $0. Tomika distributes $10,000 to its sole shareholder, Alana. What are Tomika's earnings and profits after the distribution? A. $0 B. ($10,000) C. $10,000 D. none of the above
Answers (1)
An HR manager for PepsiCo, a company known for its commitment to diversity, is seeking to hire employees who are very comfortable with racial, cultural, and sexual diversity.
Answers (1)
All of the following food safety hazards can cause food to become unsafe for human consumption, except for: Biological Chemical Metaphysical Physical
Answers (1)
How have technological advancements in knitting affected fabric production? A. by increasing the use of yarn B. by increasing the cost of production C. by increasing design possibilities D. by improving fabric quality E.
Answers (1)
A country that has multinational corporations is most likely to be
Answers (2)
Home » Business » Mr. Cobb, a corn farmer, pays his workers $8 an hour. At his current level of labor use, the marginal product of an additional hour of labor is three bushels of corn. The market price of corn is $2.75. In order to maximize his profits, Mr.
Sign Up Forgot Password?