6. The relationship between marginal physical product and margınal cost Hubert's Big Burger is a small restaurant that sells hamburgers. For Hubert, grills are a fixed input and workers are variable inputs. Assume that labor is Hubert's only variable cost. Hubert has a fixed cost of $80 per day and pays each of his workers $120 per day. Hubert's total product schedule and total cost at each level of labor are presented in the following table. Fill in the blanks to complete the Marginal Physical Product of Labor column for each worker and the Marginal Cost column at each level of labor. (Hint: Marginal cost is the change in total cost divided by the change in the quantity of output. You can calculate it here by dividing the increase in total cost from hiring one more worker by the marginal physical product from hiring one more worker.) Marginal Physical Product of Labor (Burgers per day) Marginal Cost (Dollars per burger) Total Cost Quantity of Labor (Workers) Quantity of Output (Burgers per day) (Dollars per day) $80 $4 1 40 $200 $4 100 $320 3 140 $440 24 4 160 $560 2$ 175 $680 When hiring the first and second workers, Hubert's Big Burger faces marginal returns to labor. Over the range of workers for which the marginal product of labor is increasing, Hubert's Big Burger faces marginal cost. AAA^
6. The relationship between marginal physical product and margınal cost Hubert's Big Burger is a small restaurant that sells hamburgers. For Hubert, grills are a fixed input and workers are variable inputs. Assume that labor is Hubert's only variable cost. Hubert has a fixed cost of $80 per day and pays each of his workers $120 per day. Hubert's total product schedule and total cost at each level of labor are presented in the following table. Fill in the blanks to complete the Marginal Physical Product of Labor column for each worker and the Marginal Cost column at each level of labor. (Hint: Marginal cost is the change in total cost divided by the change in the quantity of output. You can calculate it here by dividing the increase in total cost from hiring one more worker by the marginal physical product from hiring one more worker.) Marginal Physical Product of Labor (Burgers per day) Marginal Cost (Dollars per burger) Total Cost Quantity of Labor (Workers) Quantity of Output (Burgers per day) (Dollars per day) $80 $4 1 40 $200 $4 100 $320 3 140 $440 24 4 160 $560 2$ 175 $680 When hiring the first and second workers, Hubert's Big Burger faces marginal returns to labor. Over the range of workers for which the marginal product of labor is increasing, Hubert's Big Burger faces marginal cost. AAA^
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:6. The relationship between marginal physical product and margınal cost
Hubert's Big Burger is a small restaurant that sells hamburgers. For Hubert, grills are a fixed input and workers are variable inputs. Assume that labor
is Hubert's only variable cost. Hubert has a fixed cost of $80 per day and pays each of his workers $120 per day.
Hubert's total product schedule and total cost at each level of labor are presented in the following table.
Fill in the blanks to complete the Marginal Physical Product of Labor column for each worker and the Marginal Cost column at each level of labor.
(Hint: Marginal cost is the change in total cost divided by the change in the quantity of output. You can calculate it here by dividing the increase in
total cost from hiring one more worker by the marginal physical product from hiring one more worker.)
Marginal Physical Product of Labor
(Burgers per day)
Marginal Cost
(Dollars per burger)
Total Cost
Quantity of Labor
(Workers)
Quantity of Output
(Burgers per day)
(Dollars per day)
$80
$4
1
40
$200
$4
100
$320
3
140
$440
24
4
160
$560
2$
175
$680
When hiring the first and second workers, Hubert's Big Burger faces
marginal returns to labor.
Over the range of workers for which the marginal product of labor is increasing, Hubert's Big Burger faces
marginal cost.
AAA^
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