(Table: Total Product of Labor at Debbie's Bakery) Use Table: Total Product of Labor at Debbie's Bakery.Debbie can sell cakes at $10 each.Debbie must pay each worker $30 per day.Now suppose the government imposes a minimum wage law that all bakeries must pay no less than $50 per day.Debbie ___ employment from _ workers to ___ worker(s) .

A) reduces;6;1
B) reduces;6;5
C) reduces;6;4
D) increases;1;4

Question

(Table: Total Product of Labor at Debbie's Bakery) Use Table: Total Product of Labor at Debbie's Bakery.Debbie can sell cakes at $10 each.Debbie must pay each worker $30 per day.Now suppose the government imposes a minimum wage law that all bakeries must pay no less than $50 per day.Debbie _____ employment from _____ workers to _____ worker(s) .

A) reduces;6;1
B) reduces;6;5
C) reduces;6;4
D) increases;1;4

Julie Marquez · Accepted Answer

Final Answer : C, Explanation :  Based on the table, at $30 per day, Debbie employs 6 workers to produce 120 cakes. However, with a minimum wage of $50 per day, Debbie will need to reduce her workforce. The total product of labor decreases after the 4th worker, so it makes sense for Debbie to reduce her workforce from 6 workers to 4 workers, minimizing her labor costs while still producing a sufficient quantity of cakes to meet demand. Therefore, the correct choice is C.

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