12. The marginal productivity theory Which of the following points constitute the marginal productivity theory? Check all that apply. Marginal factor cost of a firm that is a factor price taker, is constant and equal to its factor price. Firms hire the factor quantity at which marginal revenue product equals marginal factor cost. Marginal revenue product of a perfectly competitive firm is greater than value marginal product. Marginal revenue product of a perfectly competitive firm equals value marginal product. Suppose that Lorenzo works for Clear Drop Co, a perfectly competitive firm producing water filters. Lorenzo was paid $4,000 but found a better job and quit Clear Drop. Since nothing else changed, Clear Drop's total revenue

12. The marginal productivity theory Which of the following points constitute the marginal productivity theory? Check all that apply. Marginal factor cost of a firm that is a factor price taker, is constant and equal to its factor price. Firms hire the factor quantity at which marginal revenue product equals marginal factor cost. Marginal revenue product of a perfectly competitive firm is greater than value marginal product. Marginal revenue product of a perfectly competitive firm equals value marginal product. Suppose that Lorenzo works for Clear Drop Co, a perfectly competitive firm producing water filters. Lorenzo was paid $4,000 but found a better job and quit Clear Drop. Since nothing else changed, Clear Drop's total revenue

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: The Markets For The Factor Of Production

Section: Chapter Questions

Problem 3PA

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12. The first two columns in the following table give a firm's short-run production func- tion when the only variable input is labor, and capital (the fixed input) is held constant at 5 units. The price of capital is $2,000 per unit, and the price of labor is $500 per unit. Cost Average cost Units of labor Units of Average Marginal output Marginal cost product product Fixed Variable Total Fixed Variable Total XX XX XX XX XX XX 20 4,000 40 10,000 60 15,000 80 19,400 100 23,000 a. Complete the table. b. What is the relation between average variable cost and marginal cost? Between av- erage total cost and marginal cost? c. What is the relation between average product and average variable cost? Between marginal product and marginal cost?
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Suppose you are given the following table (note: labor is the only variable input and all workers are paid equally): Labor Quantity Fixed Costs Variable Costs Total Costs 0 units $10 0 1 2 3 10 units 18 units 20 units $50 What is the value of this company's fixed costs? O a. $0 O b. $10 O C. $20 O d. $30 O e. $50
The figure at right illustrates short-run cost curves for a firm. Based on this figure, which of the following is true? O A. A is the total cost curve, B is the marginal cost curve, and C is the total fixed cost curve. O B. A is the average variable cost curve, B is the total fixed cost curve, and C is the average total cost curve. O C. A is the total cost curve, B is the total variable cost curve, and C is the total fixed cost curve. O D. A is the total cost curve, B is the total variable cost curve, and C is the marginal cost curve. O E. A is the average variable cost curve, B is the average total cost curve, and C is the marginal cost curve. Quantity с
Cost 8 Firm A Firm C FIGURE 8-1 O O O LRAC Output LRAC Output Cost Cost Firm B Firm D LRAC Output LRAC Output 4 Refer to Figure 8-1. For which of the four firms would the family of short-run average total cost curves lie below the LRAC? 选择一项: O A. Firm A O B. Firm B C. Firm C D. Firm D E. none of the four firms
7. You are the manager of a firm that uses only labor and capital to produce your product. Assume you hire labor and you rent capital equipment in a very competitive market. You pay your employees at a wage rate of $20 per hour and you rent capital at $25 per hour. Assume the marginal product of labor is 50 units of output per hour and the marginal product of capital is 80 units of output per hour. Based on these given information, clearly explain if you should increase, decrease, or leave unchanged the amount of capital used in your production process.
3. Suppose that labor is the only input used by a perfectly competitive firm. The firm's production function is as follows: Days of Labor 0 days 2 Units of Output 0 units L 118 119 4 a Calatane dhe marginal product of each additional worker. h. Each unit of output sells for $10. Calculate the value of the marginal product of
Variable Input 1 Variable Input 2 Fixed Input $30 $20 $40 Price A Marginal Product 60 B Suppose you are the manager of Super Suds, a large manufacturer of laundry detergent that uses two variable inputs and one input that is fixed in the short-run. Refer to the table above. In the short run, if A = 40 and B = 40, which of the following is true? Select one: O A. You should buy more of Input 1 and less of Input 2. O B. You should buy more of Input 2 and less of Input 1. OC. You should buy less of the Fixed Input. O D. Your firm is minimizing costs.
Question 19 widget-manufacturing The production function for a firm is given by q = 9K0.5L0.5, where q is the number of widgets produced each hour, K is the number of specialized staplers (which is fixed at 4 in the short run), and L is the number of employees. What is the marginal product of labor at L = 9? O 18 O 3 none of the above
4 No production in the short-run and positive production in the long-run Suppose that the marginal cost curves in the short-run and in the long-run are identical for a certain firm, and that the short-run average cost curve is below the long-run average cost curve. Then for a certain price, we can show that the firm wants to produce in the short-run, but not in the long-run. In this question, we will investigate whether a reversed situation is possible. Consider the following production function: Q = L³K². The wage for labor (L) is w = 1. The cost of using capital (K) has two parts: the first is the rent that the firm needs to pay capitalists (r = 2), and the second is the maintenance cost (m = 2). The firm can change labor and capital in the long-run, but it can change only labor in the short-run. Thus, the long-run economic cost with (L,K) is wL+ (r+m)K, while the short-run economic cost of running the firm is wL + mko for given capital Ko. (Here we are implicitly assuming the…
Betsy's Bangles produces and sells woven bracelets. The table shows information about the number of workers employed, daily bracelet production, and the marginal product of labor (MPL). Use this to answer the questions. You must calculate the bracelet values that are absent to answer the question. How many bracelets can be produced by 5 workers? bracelets from 5 workers: Workers 0 1 2 3 4 5 Bracelets 0 1 * 39 * * MPL www 1 26 12 8 4 bracelets