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Espresso Yourself Coffee Shop Hires Workers in a Competitive Labor

Question 20

Multiple Choice

Espresso Yourself Coffee Shop hires workers in a competitive labor market to make coffee. The ingredients required to make each cup of coffee cost 50 cents. The coffee shop's hourly output of coffee varies with the number of workers hired, as shown in the table below. Each cup of coffee sells for $2.00.  Number  of  workers  Coffee  (Cups/hour)  00125245360470575\begin{array}{|c|c|}\hline \begin{array}{c}\text { Number } \\\text { of } \\\text { workers }\end{array} & \begin{array}{c}\text { Coffee } \\\text { (Cups/hour) }\end{array} \\\hline 0 & 0 \\\hline 1 & 25 \\\hline 2 & 45 \\\hline 3 & 60 \\\hline 4 & 70 \\\hline 5 & 75 \\\hline\end{array}

The marginal product of the third worker is ______ than the marginal product of the second worker, implying that______.


A) greater; diminishing returns are absent
B) less; diminishing returns are present
C) neither greater nor less; the third worker will be hired
D) less; the third worker will never be hired

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