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 shown in the table below. Assume the product price is $5. a. Calculate the marginal revenue product and the marginal resource cost, and then fill in the blanks in the labor supply table. Instructions: Enter your answers as a whole number. Units of Labor Marginal Product Marginal Revenue Product Total Product Total Labor Cost Marginal Resource Wage Rate 47 (Labor) Cost 10 400 $9 $90 11 418 18 90 12 132 12 434 16 80 15 180 13 448 14 70 18 234 14 460 12 60 21 294 15 470 10 50 24 360 b. What are the equilibrium wage rate and level of employment? Equilibrium wage rate = $ Equilibrium level of employment = 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 shown in the table below. Assume the product price is $5. a. Calculate the marginal revenue product and the marginal resource cost, and then fill in the blanks in the labor supply table. Instructions: Enter your answers as a whole number. Units of Labor Marginal Product Marginal Revenue Product Total Product Total Labor Cost Marginal Resource Wage Rate 47 (Labor) Cost 10 400 $9 $90 11 418 18 90 12 132 12 434 16 80 15 180 13 448 14 70 18 234 14 460 12 60 21 294 15 470 10 50 24 360 b. What are the equilibrium wage rate and level of employment? Equilibrium wage rate = $ Equilibrium level of employment = workers
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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a and b
Transcribed Image Text: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 shown in the table below. Assume the product price is $5.
a. Calculate the marginal revenue product and the marginal resource cost, and then fill in the blanks in the labor supply table.
Instructions: Enter your answers as a whole number.
Units of
Labor
Marginal
Product
Marginal
Revenue
Product
Total Product
Total Labor
Cost
Marginal
Resource
Wage Rate
47
(Labor) Cost
10
400
$9
$90
11
418
18
90
12
132
12
434
16
80
15
180
13
448
14
70
18
234
14
460
12
60
21
294
15
470
10
50
24
360
b. What are the equilibrium wage rate and level of employment?
Equilibrium wage rate = $
Equilibrium level of employment =
workers
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