Part 1 - Check Your Understanding- Answer the question. 1. Fully explain the difference between the factor market (resource market) and the product market. Part 2- Practice- Assume that you and your cousin start a business selling belt buckles. The price of a belt buckle is $6 and the minimum wage is $10. Complete the table and answer the questions 2. In this scenario, do you Units Total Marginal Product Total Marginal Marginal supply or demand labor? Of Product Product Price Revenue Revenue Resource Labor (L) (Q) (MP P "TR) Product Cost 3. What happened to the 0 0 $6 $0 marginal revenue product of - 4 $6 each worker as more workers are hired? What 2 6 36 causes this to happen? 3 14 $6 A 3 $6 19 $6 6 1 $6 7 20 $6 Part 3- Graph It- Graph the MRP and MRC from Wage the table above and label them MRP, and MRC, $40 then answer the questions. 36 4. How many workers should you hire to 32 maximize profit? How can you tell? 28 5. Assume that your fixed costs are $20 24 Calculate your profit or loss. Show your work. 20 16 6. If the minimum wage increased to $25, how many workers would you hire to maximize 12 profit? 7. Assume instead that the price of belt buckles decreased. How will that affect the MRP of your workers? 2 6 7 Workers 8. Other than a change in the price of belt buckles, what else could cause the MRP of your workers to change. Explain your