a) Employ the skill circle model and calculate skill range, skill range and total labor cost per worker when there are 240 workers and unit training cost is $1260/h and the wage equals $80/h. Training cost is to be borne by the firm. b) Now assume the firm moves to a smaller location and the number of workers is only a quarter of what is was at the first location. Will overall labor cost be a quarter as well? Calculate!

a) Employ the skill circle model and calculate skill range, skill range and total labor cost per worker when there are 240 workers and unit training cost is $1260/h and the wage equals $80/h. Training cost is to be borne by the firm. b) Now assume the firm moves to a smaller location and the number of workers is only a quarter of what is was at the first location. Will overall labor cost be a quarter as well? Calculate!

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Engle sells Lebanese sandwiches. The cost of ingredients (bread, meat, spices, etc.) to make a sandwich is US$2. Engle pays her employees US$60 per day. She also incurs a fixed cost of US$120 per day. What is Engle's total cost per day when she does not produce any sandwiches and does not hire any workers? $120 $2 $0 $60
Question 1 Consider the cost function C (q1, 92) = = 91 + 92 + (q1q2)/3 Check whether it exhibits 1. Decreasing ray average cost 2. Economies of scale 3. Economies of scope Check whether it is subadditive
Assume: A firm pays $500 for a unit of capital. This capital generates $500 of total revenue. The firm could have earned a 10% return from the best alternative use of its $500. Calculate explicit cost, implicit cost and profit.
(A) With P = 20, W = 25 and TFC = 500: Labor Output (Q) (L) 5 10 25 35 50 60 10 25 60 70 80 90 Marginal Physical Product of AVC=VC/Q ATC=TC/Q Labour (MPPL) 2 3 4 2 2 1 Average Physical Cost Product of (TC) (VC) Labour (APPL) 2 2.5 2.4 2 1.6 1.5 MPPL = Change in Q / Change in L APPL=Q/L TC = TFC + VC VC=W* L MC = Change in TC / Change in Q Total Variable Marginal Average Cost Variable 625 750 1125 1835 1750 2000 125 250 625 875 1250 1500 Cost (MC) 15 10 6 10 15 30 Average Total Cost Cost (AVC) (ATC) 12.50 10.00 10.42 12.50 15.63 16.62 62.5 30.00 18.75 26.21 21.88 22.22 Based on this table, answer this: 1. How much output will this firm produce? If the price of output increases to $30, how does your answer change? 2. If the productivity of labor increases by 10% (all else equal), how much more labor will the firm hire? 3. Below what price will this firm decide to produce zero units of output? (i.e. shut down)
None
What is the trend in cost?
Provethatthetechnologyf(L,K)=L2+K2 exhibitsincreasingreturnstoscale. What is the formula for the average product of capital? For the total cost curve TC(q) = q3, prove the technology exhibits decreasing returns to scale
6
No hand written solution and no image
Suppose that your grade on this examination is described by G = 2 A 0 . 5 E 0 . 5 , where G is your numerical score, A is ability, and E is effort measured in terms of hours studied. This grade production function reflects
a) Explain the concept of economies and diseconomies of scale and briefly state their effects on the cost function.