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##### Suppose that Tom and Jane work from home stuffing envelopes

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Suppose that Tom and Jane work from home stuffing envelopes. Specifically, they must staple several sheets of paper together, fold them into thirds, place them in envelopes, seal the envelopes, and place labels and stamps on the envelopes. Suppose that they have two manual staplers and must do everything else by hand.;Tom and Jane are considering buying an electric stapler, which automatically staples anything placed beneath it. The table below shows their output and productivity with zero, one, and two electric staplers.;Number of Electric Staplers Total Number of Envelopes Stuffed per Week;(Output) Total Hours of Work per Week Envelopes Stuffed per Hour of Work;(Productivity);0 19,200 80 240;1 38,400 80 480;2 48,000 80 --;5.2. According to the table, when Tom and Jane get their first electric stapler their productivity increases by 240 envelopes per hour, but when they get their second electric stapler their productivity increases by only 120 envelopes per hour. This is an example of which of the following?;A. Diminishing returns to capital;B. Compound interest;C. Human capital;D. Absence of private property rights

Paper#24056 | Written in 18-Jul-2015

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