The Push-Up Machine - Labor Market Activity

The video tutorial introduces a pushup machine that converts human pushups into electricity, priced at $1 per pushup. The instructor explains the fixed cost of the machine and the wage for workers. Through a classroom activity, students simulate hiring workers to maximize profit, learning about marginal analysis and diminishing returns. The tutorial concludes with a discussion on the impact of minimum wage on hiring decisions.

What is the fixed cost of the push-up machine?

• $10

• $20

• $40

• $30

How much does each worker earn for their labor?

• $4

• $5

• $6

• $3

What happens to the output as more workers are added?

• Output remains constant

• Output increases indefinitely

• Output initially increases then decreases

• Output decreases

What is the term for the additional output produced by each worker?

• Total Product

• Fixed Product

• Average Product

• Marginal Product

How do you calculate the marginal revenue product?

• Wage times total output

• Price times marginal product

• Price times total output

• Wage times marginal product

What is the formula for calculating profit?

• Total Revenue plus Total Cost

• Fixed Cost plus Variable Cost

• Total Cost minus Total Revenue

• Total Revenue minus Total Cost

How many workers should be hired to maximize profit?

• 3

• 2

• 4

• 5

What happens if the wage is increased to $10?

• More workers are hired

• Fewer workers are hired

• The same number of workers are hired

• Workers are paid less

What is the effect of a minimum wage on hiring decisions?

• Increases the number of workers hired

• Decreases the number of workers hired

• Has no effect on hiring

• Increases the profit

Why can't a company hire more workers when the wage is increased?

• The company has too many workers

• The workers are not skilled enough

• The revenue generated is insufficient

• The company dislikes the workers