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Paper Pushers Inc

Question 2

Multiple Choice

Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table below. Paper Pushers Inc. hires workers in a competitive labor market. Apart from labor, the company has no other variable inputs. The company's hourly output varies with the number of workers hired, as shown in the table below.   The VMP of the sixth worker is ______ than the VMP of the fourth worker because ______. A) less; the firm experiences economies of scale. B) more; of the law of increasing returns. C) less; of the law of diminishing returns. D) more; workers can specialize and exploit their comparative advantage. The VMP of the sixth worker is ______ than the VMP of the fourth worker because ______.


A) less; the firm experiences economies of scale.
B) more; of the law of increasing returns.
C) less; of the law of diminishing returns.
D) more; workers can specialize and exploit their comparative advantage.

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