4. Standard Enterprises produces an output that it sells in a highly competitive market at a price of $100 per unit. Its inputs include two machines (which cost the firm $50 each) and workers, who can be hired on an as- needed basis in a labor market at a cost of $2,800 per worker. Based on the following production data, how many workers should the firm employ to maximize its profits? Workers Output Machines 2 2 2 2 2 2 2 0 1 2 3 4 5 6 0 60 100 129 148 160 168

4. Standard Enterprises produces an output that it sells in a highly competitive market at a price of $100 per unit. Its inputs include two machines (which cost the firm $50 each) and workers, who can be hired on an as- needed basis in a labor market at a cost of $2,800 per worker. Based on the following production data, how many workers should the firm employ to maximize its profits? Workers Output Machines 2 2 2 2 2 2 2 0 1 2 3 4 5 6 0 60 100 129 148 160 168

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that a firm uses just two factors of production. The table given below shows what happens to output as the firm increases one or both of these inputs. The effects of increasing the amounts of both inputs Situation (i) Situation (ii) Input Input 2 Output Input 1 Input 2 Output 1 1 12 1 14 2 2 24 2 2 24 3 3 36 3 2 32 4 4 48 4 2 38 5 60 2 42 Which situation represents the long run?
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Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed. 6. Number of Workers Units of Output 0. 1. 25 2. 60 eBook 103 4 160 5. 210 240 What is the firm's average product when six workers are hired? Multiple Choice 15 units of output. 30 units of output. 40 units of output. 20 units of output.
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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…
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
3. We often work with production technologies that give rise to initially increasing marginal product of labor that eventually decreases. Are the following statements then True or False? Explain.The marginal product of labor becomes negative when the slope of the production frontier begins to get shallower as we move toward more labor input.
4. Consider a firm producing output, Q, using labour, Land capital, K as the two inputs, where the price of labour is w = 40 and the price of capital is r = 50. The firm's total costs are TC = £10,000. Assume that the production technology to produce the output is given by: Q = 20L + 30K (a) What will be the firm's optimal choice of inputs? Referring to marginal product and input prices, explain why this is the optimum point.
2. Understanding isoprofit curves Suppose that you are starting up a dog-walking service and you know several stay-at-home moms who are willing to work for you at an hourly rate of $5. You've been surveying various dog owners in your hometown, and you have discovered that the market price for dog-walking services is $10 per dog. Assume that there are no other costs to running this business other than labor. On the following graph, use the blue line (circle symbol) to graph the isoprofit curve when your profit is $300 per day. 50 45 Isoprofit for $300 40 35 30 Isoprofit for $350 25 20 15 10 10 15 20 25 30 35 40 45 50 LABOR (Hours per day) Now suppose that you want to know what the isoprofit curve looks like if the profit increases to $350 per day. On the previous graph, use the green (triangle symbol) to plot new isoprofit curve. True or False: When comparing two isoprofit curves, the isoprofit curve on the right represents a lower level of profit. O True O False Holding profit and the…
4. A competitive firm has the three-factor production function f(x, y, z) = (x + y)2/3z4/3. The factor prices used to be w = 4, wy = 2, and w, = 1. Suppose %3D that the price of factor y doubled while the other two prices stayed the same. Then the minimum cost of production: A. doubled. B. increased by more than 50% but less than 100%. C. increased by less than 50%. D. stayed the same.
A firm can use three different production technologies, with capital and labor requirements at each level of output as follows: Technology 1 Technology 2 Technology 3 Daily Output 100 150 200 250 K 6 6 7 8 L 10 13 14 16 K 7 789 L 8 10 11 13 K 8 8 9 10 L 7 8 9 11 Suppose the firm is operating in a high-wage country, where capital cost is $110 per unit per day and labor cost is $90 per worker per day. For each level of output, which technology is cheapest? At 100 units of output, is the least expensive.
Price per unit (OMR) Shoe sales per week 60 100 50 200 40 300 30 400 20 500 10 600 Consider a firm uses only labor as a variable factor of production in the short run, with the help of a example in the tabular form to express the marginal costs, marginal revenue and output levels where the firm maximizes profit. Draw a diagram corresponding to the table. Useful resources: Principles of Microeconomics, Case Fair, 10th edition. El-Sayed Emarah, R., Abou-El-Wafa, E., & El-Malaaha, G. (1983). Input Price Mechanism in Relation to Current Market Constraints (No. 1566-2016-133411).