Schweser Mock Exam 2 AM question only, horizontal, following, question

amqata

Q: The zaxon co produces one product and labor is the only variable resource in the production process. In the short run Zaxon faces a horizontal demand curve at $20/unit. The average product of labor in the short run is given in the following table:
Resource units Avg product of labor
1 25
2 22.5
3 20
4 17.5
If the price of each unit of labor (workerdays) is $350, an only whole units can be employed, how many units of labor will Zaxon employ?
The correct answer is 2, but I’m not sure how to calculate it.

cchang

This question is weird!

onelife1

Calc your revenue ……….. Calc you profit
25*20=500 ………. 5001*350=150
22.5*2*20=900 ………… 9002*350=200
20*3*20=1200 ………… 12003*350=150
17.5*4*20=1400 …………. 14004*350=0
That’s how i did it