Imagine you've been hired as the manager of a firm producing a certain product X. Thefollowing schedule shows the total production per week of product X Additionally,assume each unit of product X sells for $10 per unit, workers can be hired in acompetitive labor market for $500 per week, and the rental price of a unit of capital is$R per weekCapital (K) Quantity (Q)Labor (L)05015402510535170452455532565410755008559595695105760115810125855135890145915155930a. How many workers should be hired? To answer this question, append to the abovetable three new columns similar to columns (3), (4) and (5) of Table 5-2 in yourtextbook. Explain your final answer!

We'll calculate these for each number of workers:Decision RuleThe firm should hire workers up to the…

Answered: Imagine you've been hired as the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume that labor and capital are the only inputs used by a firm. Capital is fixed at 5 units, which cost $100 each. Workers can be hired for $200 each. Complete the following table to show average variable cost (AVC), average total cost (ATC), and marginal cost (MC).
Which of the following determines the firm's demand curve for labor? a.The size of the labor force b.The marginal product of labor c.The total product of labor d.The average product of labor
V7
Consider the table below that describes the production function for a good (Q) in terms of inputs labor (L) and capital (K) in the short run. K L Q 10 0 0 10 1 15 10 2 30 10 3 50 10 4 60 10 5 65 10 6 68 What is the marginal product of labor for the fourth worker? Enter the number below.
A widget manufacturer has an infinitely substitutable production function of the form q= 2K+L a. Graph the isoquant maps for q=20, q=40, and q=60. What is the RTS along these isoquants? b. If the wage rate (w) is $1 and the rental rate on capital (v) is $1, what cost-minimizing combination of K and L will the manufacturer employ for the three different production levels in part a? What is the manufacturer’s expansion path? c. How would your answer to part b change if (v) rose to $3 with (w) remaining at $1?
A firm produces output according to a production function: Q = F(K,L) = min {4K,4L). a. How much output is produced when K= 2 and L = 1? unit(s) b. If the wage rate is $60 per hour and the rental rate on capital is $40 per hour, what is the cost-minimizing input mix for producing 8 units of output? Capital: Labor: c. How does your answer to part b change if the wage rate decreases to $40 per hour but the rental rate on capital remains at $40 per hour? O Capital decreases and labor increases. O It does not change. O Capital increases and labor decreases. O Capital and labor increase.
Continuing to refer to Table 7.9 and Figure 7.7, compute the average total cost, average variable cost, and marginal cost of producing 60 and 72 haircuts. Draw the graph of the three curves between 60 and 72 haircuts.
Q3) A chair manufacturer hires its assembly-line labor for $30 an hour and calculates that the rental cost of its machinery is $15 per hour. Suppose that a chair can be produced using 4 hours of labor or machinery in any combination. If the firm is currently using 3 hours of labor for each hour of machine time, is it minimizing its costs of production? If so, why? If not, how can it improve the situation?
4. A firm has a linear production function Q = 16L + 8K. The price of labor, w, is $6 per unit and the price of capital services, r, is $2 per unit. Find the optimal input combination given that the firm wishes to produce 320 units of output. Illustrate your answers with a diagram.
Jay has opened a pizza restaurant. For this restaurant there are only two inputs, rent, and workers. The space is leased at $200 per day. Each worker costs $100 per day. (a) Complete the table below: Labor Quantity Fixed Costs Variable Costs Total Costs АТС 1 10 2 25 3 45 4 60 70 75 ENTER YOUR ANSWERS WITHOUT DOLLAR SIGNS. PLEASE ROUND TO THE NEAREST CENT. IF YOUR ANSWER IS A WHOLE DOLLAR, DO NOT INCLUDE A DECIMAL WITH ZERO CENTS ATTACHED (Ex. if your answer is $3.333333, enter 3.33, if your answer is $25.00 just enter 25) 72 re to search
Suppose that Tim runs his own lawn care service and that his firm is competitive in the lawn care industry. He has a fixed number of tools that can be used to maintain a yard, but he needs to determine the productivity gained from hiring various numbers of workers per week. Which of the following statements best represents the idea behind the marginal product of labor ( MPL )? When Tim hires more workers, he can mow more lawns per week, but at a decreasing rate. If Tim hires twice as many workers per week, he can mow twice as many lawns per week. If Tim buys one more lawn mower, he can mow 13 more lawns per week. If Tim hires an additional worker per week, he can mow 11 more lawns per week. The following graph portrays the weekly total product curve for lawn mowing given a fixed amount of capital and varying labor inputs. (Note: Each black point (plus symbol) represents a point on the total product curve.) 100 90 во 70 60 50 40 30 20 10 xxxx_ Total Product ° 0 1 2 4 5 7 8 10 LABOR…
Assume that the average product for six workers is fifteen. If the marginal product of the seventh worker is eighteen. A)marginal product is rising b)marginal product is falling c)average product is rising d)average product is falling

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