Assume Manfred's Shoe Shine Parlor hires labor, its only variable input, under purely competitive conditions. Shoe shinesare also sold competitively.Units of Labor Total ProductMarginal ProductTotal Revenue01AWNF2345670143035394414102$ 112240312336352If the wage rate is $40 and Manfred's only fixed input is capital, the total cost of which is $35, then what will be hiseconomic profit?Multiple Choice1201128556

In purely competitive market, there are large number of sellers producing identical goods. Firms do…

Assume Manfred's Shoe Shine Parlor hires labor, its only variable input, under purely competitive conditions. are also sold competitively. Units of Labor Total ProductMarginal ProductTotal Revenue 0 1 NMS67 2 3 4 5 7 0 14 30 35 39 44 14 40 10 2 $ 112 240 312 336 352 If the wage rate is $40 and Manfred's only fixed input is capital, the total cost of which is $35, then what will b economic profit? Multiple Choice 120 112 85 56

Assume Manfred's Shoe Shine Parlor hires labor, its only variable input, under purely competitive conditions. are also sold competitively. Units of Labor Total ProductMarginal ProductTotal Revenue 0 1 NMS67 2 3 4 5 7 0 14 30 35 39 44 14 40 10 2 $ 112 240 312 336 352 If the wage rate is $40 and Manfred's only fixed input is capital, the total cost of which is $35, then what will b economic profit? Multiple Choice 120 112 85 56

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.

Question

Assume Manfred's Shoe Shine Parlor hires labor, its only variable input, under purely competitive conditions. Shoe shines
are also sold competitively.
Units of Labor Total ProductMarginal ProductTotal Revenue
0
1
AWNF
2
3
4
567
0
14
30
35
39
44
14
10
2
$ 112
240
312
336
352
If the wage rate is $40 and Manfred's only fixed input is capital, the total cost of which is $35, then what will be his
economic profit?
Multiple Choice
120
112
85
56

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Complete the following statement about the marginal productivity theory. For a firm that is a factor price taker, _____ , And firms hire the factor quantity at which _____. Thus, it follows that _____. Suppose that Manuel works for Clear Drop Co, a perfectly competitive firm producing water filters. Manuel was paid $3,000 but found a better job and quit Clear Drop. Since nothing else changed, Clear Drop's total revenue _____. Blank 1: a. MFC = P b. MFC = 0 c. MFC < P d. MFC > P Blank 2: a. MRP = MFC b. MRP = 0 c. MRP < MFC d. MRP > MFC Blank 3: a. W = MRP b. W < MRP c. W > MRP Blank 4: a. does not change as well b. falls by $1,500 c. falls by $3,000 d. rises by $1,500 e. rises by $3,000
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