In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input The cost and output structure that the firm faces is depicted in the table below. Assume th product price is $6. Calculate the marginal revenue product and the marginal resource cost, and then complet- the table. Instructions: Enter your answers as whole numbers. Quantity of Labor Marginal Product Marginal Revenue Product ($) Hourly Wage Rate ($) Marginal Resource (Labor) Cost ($) Total Product Total Labor Cost ($) 10 400 9. 90 11 416 16 12 132 12 430 14 15 180 13 442 12 18 234 14 452 10 21 294 15 460 8. 24 360 The equilibrum wage rate ($) = The equilibrium level of labor use = workers

In the short run, a tool manufacturer has a fixed amount of capital. Labor is a variable input The cost and output structure that the firm faces is depicted in the table below. Assume th product price is $6. Calculate the marginal revenue product and the marginal resource cost, and then complet- the table. Instructions: Enter your answers as whole numbers. Quantity of Labor Marginal Product Marginal Revenue Product ($) Hourly Wage Rate ($) Marginal Resource (Labor) Cost ($) Total Product Total Labor Cost ($) 10 400 9. 90 11 416 16 12 132 12 430 14 15 180 13 442 12 18 234 14 452 10 21 294 15 460 8. 24 360 The equilibrum wage rate ($) = The equilibrium level of labor use = workers

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following figure for short run production: Total Product Stage I Stage II Stage III В E Labor
30 L* Output 0 10 20 30 40 50 60 70 100 The price of labour is $30 per unit and the price of capital is $60 per unit. The 30th unit of output adds $ 20 32 66 To produce 20 units of output the firm needs to hire 60 K* 12 26 To produce 70 units of output the firm needs to hire 52 to long-run total cost. The Long Run Average Cost of producing 50 units of output is $ The Long Run Total Cost of producing 60 units of output is $ LTC 1080 3060 units of labour. 8400 units of capital. LAC 72 97.5 LMC 36 114
Answer b part
14. A firm uses labour, L and capital K, to produce a single product, X. capital is fixed but labour is variable. The firm's production function is: X=-0.2L + 18L? + 1620L. Where X is the number of units of the product per week, and L is the number of persons employed. A. At what weekly output is marginal cost equal to average variable cost? B. if the price of the product is $0.20 per unit, what is the maximum weekly wage that the firm would pay rather than close down?
Diminishing returns occurs in the short run because The average product of labor will decrease after some amount of labor is hired in the short run b. There are fixed inputs to production in the short run The marginal product of labor will decrease after some amount of labor is hired in the short run There are variable inputs to production in the short run
GM cuts jobs at its Australian manufacturing unit GM will cut 500 jobs, or about 12% of its workforce, at its Australian plant because of a sharp fall in demand for its locally-made "Cruze" small car. Source: The Wall Street Journal, April 8, 2013 As GM cuts its workforce, how will the marginal product and average product of a worker change in the short run? Suppose that before the cuts the marginal product of GM workers is below their average product. As the number of workers decreases, the marginal product of a GM worker and the average product of a GM worker in the short run. increases; decreases does not change; does not change decreases; decreases increases; increases decreases; increases
The table below shows ABC firm short-run production function. The company hires workers at a wage rate of $400 a day and his total fixed cost is $1000. Labor (workers) Total product (output) 0 0 1 12 2 25 3 30 4 44 5 50 Calculate the average total cost of producing 25 Calculate total cost of producing 47 units. Calculate average variable cost if 30 units are produced. Calculate the marginal product of producing 44 units. Calculate average product of the 4th worker
Question 31 Explain what a production function is. What is the concept of diminishing marginal product?
Construct the average fixed cost, average variable cost, and average total cost schedules and the marginal cost schedule.
MC Qu. 41 If the variable cost curve is a straight... If the variable cost curve is a straight line, then the marginal cost curve will be horizontal. marginal cost curve is upward sloping. Omarginal cost curve will be U-shaped. Omarginal cost curve may be U-shaped.
The marginal cost curve crosses the*average total cost curve at the maximum of the average total cost curve.average variable cost curve at the minimum of the average variable cost curve.total cost curve at the minimum of the total cost curve.average fixed cost curve at the minimum of the average fixed cost curve. The average variable cost curve and average total cost curve tend to converge as output rises because*the marginal cost curve intersects the average total cost curve at its minimum.the average fixed costs are constant as output rises.the difference between them (average fixed cost) declines.output is rising more rapidly than inputs are being increased Monopoly and pure competition*are alike in that entry is easy in both.are alike in that entry is blocked in both.differ in terms of the number of firms in the industry.differ in that monopoly is associated with a standardized product and perfect competition associated with differentiated products. With respect to entry and exit,…
8 Output Marginal Labor (Q) Product I of 20 1 20 50 2 3 100 4 10 5 130 135 In the table above, what is Marginal Product (MP) between 3 and 4 units of Labor? Select one: a. 15 b. 10 C. 20 d. 25