Microeconomics
Unit 5 Practice Sheet
Part 1: Hiring Workers- Use the chart for a firm in a perfectly
competitive labor market to answer the questions.
1. Assume that the market price of the product is $3 and the wage
is $15. How many workers should be hired to maximize profit?
2. Assume that the fixed costs are $40. Calculate the profit or loss.
3. Assume that the price of the product increased to $5. How many
workers should be hired to maximize profit?
4. Assume the fixed costs stays $40. Calculate the profit or loss.
5. Assume that the government established a minimum wage of
$25, how many workers would the firm hire to maximize profit?
6. If the fixed costs are $40. Calculate the profit or loss with the $25 minimum wage and $5 price.
Part 2 - Graph Practice- The graph shows the
MRP for a different firm hiring workers in a
perfectly competitive labor market.
7. Assume that the wage is $20. Draw a marginal
resource cost (MRC) curve and identify how many
workers should be hired to maximize profit?
8. Assume that the fixed cost is $50. What is the
total cost of hiring the profit maximizing quantity?
9. Assume the firm produces in a perfectly
competitive product market and the price of the
product is $2. How much additional output did the
last worker produce?
10. Assume instead that the wage is $30. How
many workers should be hired to maximize profit?
11. Assume that the fixed cost stays $50. What is
the total cost of hiring the profit maximizing quantity?
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
Microeconomics
Unit 5 Practice Sheet
Part 3 - Least-Cost Rule- The tables below show the total amount of deliveries that can be made in a day
using delivery drivers and drones. Assume that delivery drivers cost $50 and drones cost $150. Fill out the
chart and answer the questions.
Quantity Total Marginal Quantity Total Marginal
of Drivers Deliveries Product of Drones Deliveries Product
0 0 0 0
1 100 1 150
2 150 2 225
3 175 3 270
4 180 4 285
12. With a constraint of $450, what combination of drivers and drones would minimize costs while
maximizing the total number of deliveries? Explain.
13. How many total deliveries can be made each day with this combination? Show your work.
Part 4 - FRQ Practice- Complete the following question from the 2008B AP exam (Question 3).
© Copyright Jacob Clifford 2020. Ultimate Review Packet
Teachers- Do NOT use this in your classroom. Contact me if you want to use this resource with your students
