2. Consider a price-taking firm with total fixed cost of $80 and a market-determined price of $5 per unit for its output. The wage rate is $8 per unit of labor, the only variable input. Using the information provided, complete the table provided below. (7 pts) Units of Labor Marginal Total Output Product Revenue Revenue Marginal Total Revenue Variable Product Cost Total Marginal Cost Marginal Profit Cost 5 15 2 30 4 50

2. Consider a price-taking firm with total fixed cost of $80 and a market-determined price of $5 per unit for its output. The wage rate is $8 per unit of labor, the only variable input. Using the information provided, complete the table provided below. (7 pts) Units of Labor Marginal Total Output Product Revenue Revenue Marginal Total Revenue Variable Product Cost Total Marginal Cost Marginal Profit Cost 5 15 2 30 4 50

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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#1
Total Product 75 68 66 57 42 15 0 23 never intersect the horizontal axis. 5 6 7 8 Refer to the figure above, if the marginal product of labor curve was plotted on this figure, with marginal product on the vertical axis, the marginal product of labor curve would Labor (units) reach its maximum at the 5th unit of labor. intersect the horizontal axis at a point somewhere beyond the 8th unit of labor. intersect the horizontal axis at a point between the 5th and 6th unit of labor.
Labor (workers) Output 1 20 50 3 70 4 80 85 The table shows daily output for small pizzeria based on the number of workers hired. Suppose fixed costs are $20 and labor costs are $40 per worker. The average total cost of producing 80 units equals $2.25 per unit. $0.25 per unit. $1.50 per unit. $0.75 per unit
MC Qu. 41 If the variable cost curve is a straight... If the variable cost curve is a straight line, then the marginal cost curve will be horizontal. marginal cost curve is upward sloping. Omarginal cost curve will be U-shaped. Omarginal cost curve may be U-shaped.
Total Product 75 68 66 57 42 15 0 1 2 3 4 5 6 7 8 Labor (units) Refer to Figure 11-1. If the marginal product of labor curve was plotted on this figure, with marginal product on the vertical axis, the marginal product of labor curve would never intersect the horizontal axis. intersect the horizontal axis at a point between the 5th and 6th unit of labor. intersect the horizontal axis at a point between the 6th and 7th unit of labor. intersect the horizontal axis at a point somewhere beyond the 8th unit of labor.