can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit? The firm O A. is not maximizing profit because the marginal revenue product of labor is greater than the wage. O B. is not maximizing profit because the marginal revenue product of labor is less than the wage. O C. is maximizing profit because the marginal product of labor is greater than the wage. O D. is not maximizing profit because the price of the output is not equal to the wage. fit hocause the marginal product of labor is areater than ihe wage

can produce 100 cookies per day, the cost of the average worker is $32 per day, and the price of a cookie is $1.00. Is the firm maximizing profit? The firm O A. is not maximizing profit because the marginal revenue product of labor is greater than the wage. O B. is not maximizing profit because the marginal revenue product of labor is less than the wage. O C. is maximizing profit because the marginal product of labor is greater than the wage. O D. is not maximizing profit because the price of the output is not equal to the wage. fit hocause the marginal product of labor is areater than ihe wage

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When a firm produces one unit, the variable cost is $7. When the firm produces two units, the variable cost is $10. When the firm produces three units, the variable cost is $12. What is the marginal cost associated with three units of production? Select one: O a. 3 O b. 7 O c. 2 O d. 0
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5. Consider a firm that uses both labor and capital in production. The price of capital is $20 per unit and the wage rate is $10 per hour. a. Draw the firm's isocost line assuming a total production cost of $100. How steep is this line (that is, what is its slope)? Be sure to clearly label the axes. b. Suppose the wage increases to $15 per unit. In which direction does the substitution effect change the firm's demand for labor and capital? In which direction does the scale effect change the firm's demand for labor and capital? c. If the firm chooses its labor and capital combination to minimize its production costs, will the marginal product of labor be higher than, lower than, or equal to the marginal product of capital? Why? (Assume that the price of labor and capital are those given in part b.)
If a decrease in the price of capital results in increased demand for capital and a proportional increase in the demand for labour, then capital and labour are best described as O A perfect substitutes. O B. gross complements. O C. complements in production. O D. gross substitutes.
Which of the following most directly decreases profits if nothing else changes? O Changing your wardrobe O Giving your workforce a raise O Reducing costs O Lowering price
20
7
The demand for labor curve of nurses shifts rightward if the O A. supply of labor curve for nurses shifts rightward. O B. value of marginal product of nurses increases. OC. wage rate paid to nurses rises. O D. supply of labor curve for nurses shifts leftward. O E. wage rate paid to nurses falls.
A perfectly competitive firm's production function is Q=4LK where Q is the amount produced, L is the amount of labour hired and K is the amount of capital used. P is the price that the firm gets for its product. What is the marginal revenue product of labour? O 8PK O 4L O 4PK O PL
The short run is defined as the period of time: Select one: O a. in which all inputs are fixed O b. in which at least one input is fixed O c. O d. none of the answers provided is correct in which no inputs are fixed
Select one: O a. 6 OOO Days of Labour 0 18 25 30 5 33 6 34 Refer to the table above. Suppose that the firm pays its workers $55 per day. Each unit of output sells for $12. How many days of labour should the firm hire? b. 3 c. 4 d. 5 1 2 3 4 Units of Output 0 10
Answer the question. Explain.