**Educational Insights on Pumpkin Farming**In the context of a pumpkin farmer hiring pickers at $8.50 per day, the following data illustrates the relationship between the number of pickers and the value of the pumpkin output:| Number of Pickers | Value of Pumpkin Output ||-------------------|-------------------------|| 1 | $30 || 2 | $48 || 3 | $62 || 4 | $72 || 5 | $80 || 6 | $84 || 7 | $87 || 8 | $89 || 9 | $90 || 10 | $91 |**A) Hiring Strategy for Profit Maximization**The pumpkin farmer should decide on the number of pickers to hire to maximize profits. Consider the following choices:(a) One picker, providing the greatest contribution to output.(b) Three pickers, as the fourth is more costly than beneficial.(c) Four pickers, since the fifth incurs a cost not justified by output.(d) Nine pickers, as the tenth picker’s contribution is negligible.(e) Ten pickers, equating costs to revenue.**Brief Explanation:**Analyze the marginal product of each picker and compare it against the cost of hiring to determine the optimal number for maximizing profits.**B) Impact of Wage Legislation**If a new wage law mandates a minimum daily pay of $14.50 for pumpkin pickers, evaluate the consequences for a profit-maximizing farmer:(a) Decrease in pumpkin output.(b) Decline in the average product of labor.(c) Enhanced welfare for the hired pickers under previous conditions.**Brief Explanation:**Assess how increased wages affect the decisions on hiring and output, considering the cost-benefit balance in labor productivity.

Marginal cost is the increase in cost incurred from hiring an additional picker. Value of marginal…

A and B are based on the following data, which are for a pumpkin farmer who can hire pumpkin pickers at $8.50 per day. part Number of pickers 1234567899 10 Value of pumpkin output (e) Briefly explain your answer. $30 48 62 72 80 84 87 89 90 91 A) The profit-maximizing pumpkin farmer should hire only (a) One pumpkin picker because his contribution to output is greatest. Three pumpkin pickers because the fourth costs more than he earns. Four pumpkin pickers because the fifth costs more than he earns. (b) (c) (d) Nine pumpkin pickers because the value of the marginal product of the tenth picker is zero. Ten pumpkin pickers because costs will equal revenue. B) The Great Pumpkin, in an attempt to make the pumpkin pickers better off, legislates that pumpkin pickers must be paid a wage no less than $14.50 per day. If our profit-maximizing farmer complies, which of the following will be correct? (a) The quantity of pumpkin output will fall. (b) The value of the average product of labor will fall. Each of the pumpkin pickers our farmer had previously hired will become better off. Briefly explain your answer(s).

A and B are based on the following data, which are for a pumpkin farmer who can hire pumpkin pickers at $8.50 per day. part Number of pickers 1234567899 10 Value of pumpkin output (e) Briefly explain your answer. $30 48 62 72 80 84 87 89 90 91 A) The profit-maximizing pumpkin farmer should hire only (a) One pumpkin picker because his contribution to output is greatest. Three pumpkin pickers because the fourth costs more than he earns. Four pumpkin pickers because the fifth costs more than he earns. (b) (c) (d) Nine pumpkin pickers because the value of the marginal product of the tenth picker is zero. Ten pumpkin pickers because costs will equal revenue. B) The Great Pumpkin, in an attempt to make the pumpkin pickers better off, legislates that pumpkin pickers must be paid a wage no less than $14.50 per day. If our profit-maximizing farmer complies, which of the following will be correct? (a) The quantity of pumpkin output will fall. (b) The value of the average product of labor will fall. Each of the pumpkin pickers our farmer had previously hired will become better off. Briefly explain your answer(s).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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